[Infostock Daily= Reporter Lee Kang-wook] The government will start a bond stabilization fund and a securities market stabilization fund in April, and it has more than doubled in size.
On the 24th, the Financial Services Commission discussed the measures to stabilize the financial market related to Corona 19, including the stabilization of the securities market, bond market, and short-term fund market measures at the second emergency economic meeting held by the president.
The bond market stabilization fund, which was expected to reach 10 trillion won, expanded to 20 trillion won. The first capital call was set at around 3 trillion won in April, considering the liquidity of the investment financial company, and the investment targets were corporate bonds, high-quality corporate bills (CP), and financial bonds.
"We expect to contribute to easing market anxiety as we have doubled the size of the global financial crisis in 2008," said Eun Sung-soo, chairman of the Financial Services Commission. "Today, the Risk Management Committee, composed of investment financial companies, will conduct a 3 trillion won first capital call and start buying bonds from early April. "He said.
The stock market stabilization fund increased more than 20 times from 515 billion won at the time of the global financial crisis in 2008 to 10.7 trillion won this time.
The state-run bank will invest 2 trillion won and 18 financial companies, including the five major financial holding companies, will join forces to create 10 trillion won. The Korea Exchange, KSD, Korea Securities Finance, and the Financial Investment Association invested 700 billion won.
We will recruit funds through capital call method and invest in KOSPI 200-linked products with stock market representative. The fund will be operated in the form of a hat fund, and the first capital call will be implemented in early April at a total of 3.22 trillion won, which is 30% of the total amount.
For the amount of fund investment, the ratio of soundness regulation (risk weight) will be eased to half the current level to prevent capital adequacy problems of investors and to provide tax support measures to reduce investment loss risk.
The measure also included a short-term funding market support plan.
Recently, margin calls have occurred mainly in securities firms that hedge their own ELS and DLS (derivative-linked securities), which caused market distortions as they sold short-term bonds such as CPs to prepare cash. Accordingly, it will support the short-term fund market with a size of 7 trillion won, and 5 trillion won will be invested for securities company liquidity.
Specifically, it will provide about 2.5 trillion won through securities finance and 2.5 trillion won in liquidity by the Bank of Korea in buying RP (repurchase conditional bonds). By easing call regulations, we will temporarily increase the brokerage call borrowing limit from 15% to 30%, and increase the call limit from 2% to 4%.
Tax support will also be provided to expand demand for the stock market. In order to foster ISA (personal asset management accounts) as a medium-term investment technology product, the subscription target was expanded from those with current income to domestic residents, and stocks were added to the investment target. In addition, the mandatory subscription period for more than 5 years will be exceptional according to circumstances
Reporter Lee Kang-wook gaguzi@naver.com
