Bank of Korea to launch special loan scheme for local banks, brokerages, insurers amid COVID-19 pandemic
- 4 years ago
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South Korea's central bank has rolled out an unprecedented loan scheme for local banks, brokerages and insurance companies,... aiming to cushion the local market that has rocked by the COVID-19 pandemic.
The loans worth 8-point-1 billion U.S. dollars,... will be available starting May 4th.
Kim Hyo-sun reports.
The Bank of Korea is launching a special loan program for the country's banks, insurance companies and brokerages to ease liquidity issues amid the coronavirus pandemic.
It explained Thursday that the loans will be worth some 8-point-1 billion U.S. dollars,... and will be available from May 4th,... with a borrowing period of 6 months.
It added the special loans will be provided against collateral which includes AA- rated corporate bonds,... at a rate of 85 basis points above that of 182-day Monetary Stabilization Bonds.
This is the first time the central bank has offered loans directly to non-banking financial entities like brokerages since the 1998 Asian financial crisis.
"As we aim to stabilize the corporate bond market, we decided to temporarily offer a system that provides loans to brokerages providing they have collateral like high-grade corporate bonds."
The central bank says the move could be considered a safety measure,... should the pandemic continue to cause havoc.
The funds will be available for 3 months,... after which the central bank will review the possibility of an extension,... depending on the state of the financial market and demand for funds.
Kim Hyo-sun, Arirang News.
South Korea's central bank has rolled out an unprecedented loan scheme for local banks, brokerages and insurance companies,... aiming to cushion the local market that has rocked by the COVID-19 pandemic.
The loans worth 8-point-1 billion U.S. dollars,... will be available starting May 4th.
Kim Hyo-sun reports.
The Bank of Korea is launching a special loan program for the country's banks, insurance companies and brokerages to ease liquidity issues amid the coronavirus pandemic.
It explained Thursday that the loans will be worth some 8-point-1 billion U.S. dollars,... and will be available from May 4th,... with a borrowing period of 6 months.
It added the special loans will be provided against collateral which includes AA- rated corporate bonds,... at a rate of 85 basis points above that of 182-day Monetary Stabilization Bonds.
This is the first time the central bank has offered loans directly to non-banking financial entities like brokerages since the 1998 Asian financial crisis.
"As we aim to stabilize the corporate bond market, we decided to temporarily offer a system that provides loans to brokerages providing they have collateral like high-grade corporate bonds."
The central bank says the move could be considered a safety measure,... should the pandemic continue to cause havoc.
The funds will be available for 3 months,... after which the central bank will review the possibility of an extension,... depending on the state of the financial market and demand for funds.
Kim Hyo-sun, Arirang News.