Deputy Prime Minister Kyungho CHOO met with representatives from major global financial institutions, including Blackstone, the Bank of New York Mellon, and Goldman Sachs in New York on April 10 and Former Citibank chief William Rhodes on April 11.
Meeting with Former Citibank chief
At the meeting with former Citibank chief William Rhodes, DPM CHOO expressed his gratitude for his contribution to the Republic of Korea (ROK)-U.S. alliance, celebrating the 70th anniversary of the ROK-U.S. alliance. He also noted that maintaining solid bilateral ties is critical for Korea’s flourishing down the road as evidenced by the fact that consolidating the bilateral trust and cooperation has served as a basis for the Korean economy’s development and growth.
Agreeing on him, former Citibank chief Rhodes assessed that Korea will manage to get through recent global uncertainties stemming from heightened geopolitical risks, global economic fragmentation and among others as the country has already set a good example of overcoming past crises based on Korean people’s resilience and other great characteristics. In addition, he mentioned that expanded global demand for defense and other industries and global companies’ relocating production facilities will bring new opportunities to Korea.
Meeting with representatives from major global financial institutions
DPM CHOO discussed about the current global financial and economic situations and future risk factors with CEOs from major global financial institutions. The CEOs noted that the recent banking sector instability stemmed from certain banks’ asset-liability mismatch and therefore the possibility of the instability leading to systemic risks is limited, and assessed that governments’ swift policy responses have been rapidly effective in calming the market. In particular, they noted that the current U.S. financial system’s soundness is robust unlike the 2008 financial crisis and regarding concerns about the insolvency of real estate loans for commercial use, they explained that the problems are only limited to real estate for office space as the number of vacant rooms rose due to an emerging trend of working from home.
Nevertheless, they talked about the need to take note of the spillover effects of credit crunch on the real economy along with rising borrowing costs due to interest rate hikes. They also pointed out that major countries’ national debt surged because of their high spending on measures to response to the Covid-19 pandemic and rising national debt caused by the rate hike stance and government bond market volatility would serve as risk factors.
The meetings has provided a good chance to confirm that global financial institutions maintain their positive views on the Korean government’ policy directions as well as the Korean economy and financial situations.
The CEOs from global financial institutions mentioned their plans to expand long-term investment in Korea, emphasizing that they have not heard about concerns about soundness of the Korean financial system from Wall Street investors. Moreover, they showed keen interest in the Korean government’s improvement measures for Korea’s capital and foreign exchange (FX) market and assessed that its measures including the abolishment of the Investment Registration Certificate (IRC) scheme, permission of foreign institutions (FIs)’ participation in the onshore interbank FX market and the extension of onshore FX trading hours will contribute to boosting Korea’s capital and FX market. In particular, they noted that Korea will be able to attract foreign investors who would like to their investment portfolio in Asia by stepping up its policy efforts to improve foreign investors’ market accessibility and implement mid to long-term plans to stabilize supply chains on the back of Korea’s high growth potentials. They also promised to play an active role in making the Korean government’s such policy efforts well-informed to more global investors.
DPM CHOO pointed out that major global financial institutions’ long-time interest and investment in Korea have been crucial for the ROK-U.S. economic and financial cooperation and asked for their continuous contribution. In addition, the Korean government will strive to implement multifaceted policies to improve the investment environment, mainly reflecting their advice during the policy-making process.
Text and Image Source: Ministry of Economy & Finance, Republic of Korea (Source)