The Bank Run Situation Shows Signs of Improvement
The Saemaul Geumgo bank run, characterized by a large-scale capital exodus, has reached a critical point. In response, the government is actively working to resolve the crisis and recent data suggests that the outflow of capital has started to decrease.
Withdrawals from Saemaul Geumgo Begin to Decline
According to a cross-government response group consisting of the Ministry of Public Administration and Security and the Financial Services Commission, withdrawals from Saemaul Geumgo have shown a downward trend since the 7th. After a period of accelerated outflows last week, the situation has begun to stabilize in the latter half of the week.
A government official, cited by Yonhap News Agency, revealed that the rate of increase in withdrawals slowed down on the 6th and on the following day, the 7th, withdrawals decreased by about 1 trillion won compared to the previous day. Additionally, there has been a significant increase in re-deposits, with over 3,000 customers choosing to reinvest their funds after initial cancellations.
This positive development can be attributed to the government’s effective messaging and assurance of the safety of deposits. To further mitigate the situation, the government has devised an emergency measure to restore original contract interest rates and maintain tax exemption benefits for Saemaul Geumgo customers who applied for re-deposit by the 14th of this month.
With expectations for an early resolution growing, the government plans to implement a comprehensive response next week to alleviate concerns.
Addressing the Immediate Cause: Delinquency Rate
One of the key factors contributing to the crisis is Saemaul Geumgo’s delinquency rate, which reached a record high of 6.18% last month, a significant increase from 3.59% at the end of last year. As news of the surging delinquency rates spread, fund outflows persisted.
To tackle this issue, Saemaul Geumgo intends to sell non-performing loans and reduce the delinquency rate. The Department of Home Affairs and Government Administration will closely monitor the top 100 delinquency rates, while the scale of non-performing loan sales through the Korea Asset Management Corporation is set to increase from 100 billion won to 500 billion won.
The upcoming week is expected to be a crucial turning point in the Saemaul Geumgo crisis. While the size of the capital exodus tax may have decreased, the overall sense of crisis remains significant. The forthcoming atmosphere will determine whether the situation continues to evolve positively.
© Sisa Journale – The Future of Online Journalism Unauthorized reproduction and redistribution prohibited
Reporter: Kim Ji-won
Email: kjw@sisajournal-e.com
The first decrease in the withdrawal amount in the last 7 days
3000 re-deposits in the evolution of a bank run
On the morning of the 7th, at a Saemaeul Geumgo branch in downtown Seoul, a notice stating that deposits will be safely protected is attached./Photo = Yonhap News
[시사저널e=김지원 기자] As the Saemaul Geumgo bank run situation (large scale capital exodus tax) gets out of control, the government is doing its best to resolve the bank run situation. As a result, it was confirmed that the amount of capital outflow has recently turned to a decreasing trend.
According to the ‘cross-government response group’ such as the Ministry of Public Administration and Security and the Financial Services Commission on the 9th, it was found that withdrawals from Saemaul Geumgo turned to a downward trend on the 7th. The capital outflow, which accelerated last week, has calmed down in the second half of the week.
According to a Yonhap News Agency report that day, citing a high-ranking government official, the rate of increase in withdrawals from Saemaul Geumgo slowed from the afternoon of the 6th, and the amount of withdrawals on the next day, the 7th , a decrease of about 1 trillion won from the previous day. The volume of re-orders for mid-term cancellations also increased. They found that the number of re-deposits of those who canceled half way through was over 3,000 on the 7th alone.
It is interpreted that the government’s message, “It’s okay to be at home” over the Saemaul Geumgo incident, has been effective. The government has drawn up an ’emergency measure’ to restore the original contract interest and maintain tax exemption benefits for Saemaul Geumgo customers who applied for re-deposit by the 14th among Saemaul Geumgo customers who canceled midway from 0:00 on the 1st to midnight. the 6th
If this atmosphere continues, expectations for an early evolution of the situation are expected to grow. The government plans to launch a comprehensive response next week to quell concern.
The work to reduce the delinquency rate, which is the most immediate cause of this issue, is expected to continue. As Saemaul Geumgo is engulfed in crisis rumors after revealing that its delinquency rate has soared to 6% at the end of last month, it plans to promote the sale of non-performing loans and reduce the delinquency rate.
Saemaul Geumgo’s delinquency rate increased to a record high of 6.18 percent last month. This is a significant increase of 3.59% at the end of last year. As news of the sharp rise in delinquency rates spread, fund outflows continued.
The Department of Home Affairs and Government Administration plans to check the reduction targets and implementation status of the top 100 delinquency rates. The sales scale of non-performing loans through the Korea Asset Management Corporation will also increase from 100 billion won to 500 billion won. The financial sector believes that next week will be a turning point in the Saemaul Geumgo crisis. Even if the size of the exit tax has decreased, the sense of crisis is still significant, so the atmosphere next week is expected to determine whether the situation evolves early.
© Sisa Journale – The Future of Online Journalism Unauthorized reproduction and redistribution prohibited
Pharmaceutical/Bio Department
Reporter Kim Ji-won
kjw@sisajournal-e.com
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