[Infostock Daily= Choi Jae-young, Senior Reporter] The Financial Services Commission has decided to use all measures that dealt with the global financial crisis in 2008 as financial market instability continued due to the new coronavirus infection (Corona 19 or COVID-19).
Typical measures currently under consideration include bond market stabilization funds, bond-backed securities (P-CBO), and financial stability funds.
Eun Sung-soo, chairman of the finance committee, held an emergency financial market inspection meeting at the Seoul government building in Sejong-daero, Seoul on the 17th. Eun Sung-soo, chairman of the finance committee, ordered the preparation of additional market stabilization measures such as bond market stabilization funds, bond-backed securities (P-CBO) and financial stabilization funds.
Earlier, the Financial Services Commission took measures to ease the requirements for designation of stock short selling overheating stocks on October 10, and banned short selling for six months on the 13th.
The Financial Services Commission has issued such measures because the volatility of the financial market has continued to expand.
“The volatility of the financial market has expanded significantly in recent years and it could last for a considerable period of time, so be aware of the market and keep an eye on it,” said Eun Sung-soo, chairman of the finance committee.
The bond market stabilization fund, which the Financial Services Commission mentioned on the day, is a fund established to support the liquidity of companies suffering temporary financial difficulties due to the bond market downturn and to resolve the spread gap between treasury bonds and corporate bonds.
In 2008, it was built to supply 10 trillion won in liquidity to companies during the global financial crisis.
At that time, four institutions, including the Securities Association, the Securities and Futures Exchange, the Securities Depository, and the Asset Management Association, jointly created 515 billion won and invested funds in the stock market several times from November 2008 to March of the following year.
As the Financial Services Commission has released this measure, it is highly likely that another high-intensity additional measure will be taken in the market.
The Financial Services Commission is reported to include a temporary suspension of stock trading and a temporary shutdown in the contingency plan for stabilizing the stock market.
As a result, if the stock market continues to plunge, it will shorten operating hours or reduce the current 30% share price limit.
However, the Financial Services Commission did not actually implement such measures during the global financial crisis in 2008, so it is highly unlikely that the measures will be used.
The Financial Services Commission also decided to hold a market inspection meeting every day before the stock market opens until the stock market stabilizes.
Senior Reporter Choi Jae-young caelum@infostock.co.kr
