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4th Meeting of Central Economic Response Headquarters

  • DivisionPolicy Coordination Bureau - General Policy Coordination Division
  • DateMay 20, 2020
  • Tel0442154510

4th Meeting of Central Economic Response Headquarters

18th Ministerial Meeting on the Economy


State-owned Bank and Central Bank to Create SPV to Buy Corporate Debt



Deputy Prime Minister Hong Nam-ki presided over the 4th Meeting of the Central Economic Response Headquarters, that is the 18th Ministerial Meeting on the Economy, held on May 20. 

Participants reviewed plans to purchase corporate debt through an SPV and ways to manage the 40 trillion won key industry relief package.  Action plans for over 550,000 job creation in the public sector and how to revive tourism were also discussed.


The following is a summary of DPM Hong’s keynote address.


Absorb shocks in the job market:  Action plans for over 550,000 job creation in the public sector, part of the 1.56 million job creation project announced last week


- 100,000 remote or tech jobs (1 trillion won):  data management and content development (6.4 jobs), and public services (3.6 jobs)

- 300,000 jobs for unskilled workers (1.5 trillion won):  jobs to improve community hygiene (78,000 jobs) and public safety (6,000 jobs), and others created according to the demand from 243 municipalities

- 50,000 high tech jobs for young adults (0.5 trillion won):  such jobs as content development and big data management

- 50,000 internships for young adults (0.24 trillion won):  tourism-ICT industrial convergence and waste management

- SME wage support for 50,000 new employees for up to 6 months (0.3 trillion won)


This 3.5 trillion won worth of plan will be implemented on the passage of the 3rd extra budget.  The government will also work on tax, financial and regulatory supports to promote job creation in the private sector.  The second-half economic policies of 2020, scheduled to be released early June, will contain the measures to support the private sector.


Topics of discussion


1) Revive tourism


Tourism-related businesses, accounting for 4.9 percent of GDP, have been hit hardest by the COVID pandemic.  We will work to boost demand for domestic tourism, as well as working on mid-term measures to attract foreign tourists after the pandemic.


2) How to manage the 40 trillion won key industry relief package


- Support to be given to airlines, shipping companies and other key industry companies if they owe more than 500 billion won in debt and employ over 300 workers:  In addition, support can be expanded to those with core technologies and those whose businesses are critical to maintain the country’s industrial ecosystem

- Support to be given in the type the company wants from liquidity to other types of recapitalization:  A total of 1 trillion won can be spent on supplier relief programs drawn up by the company

- Recipient companies to be obliged to retain at least 90 percent of their employees for six months since the support is given, support to include ELS purchases (10 percent of the support), and dividend payment and stock buybacks to be banned


3) Plans to purchase corporate debt through an SPV


The government will support the Korea Development Bank (KDB) and the Bank of Korea (BOK) setting up an SPV, through which the banks will purchase corporate debt including low rated bonds. 


- A total of 10 trillion won to be invested in the SPV:  KDB to invest 2 trillion won (1 trillion won government investment in KDB and 1 trillion won in subordinated loans) and BOK to invest 8 trillion won (primary loans)

- The SPV to buy corporate debt, including low rated corporate bonds and CPs

- The SPV will be run for six months, and then the decision will be made on whether it will be extended or not, and whether it will be expanded to 20 trillion won


The SPV will be a model of cooperation among the government, central bank and state-owned bank in responding to a crisis. 



Please refer to the press release by the Financial Services Commission for details about the SPV


Please refer to the attached pdf


Ministry of Economy and Finance
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