F4 Meeting: "Accelerating Real Estate PF Resolution and Restructuring"

Korea Economic Daily

Summary

The government announced plans to accelerate the resolution and restructuring of insolvent real estate project financing (PF) sites.
The F4 meeting will discuss response measures while closely monitoring volatility in domestic and international financial markets.
It was assessed that uncertainty in tariff negotiations with the US and volatility in major countries' bond markets continue.

On the 23rd, the government held a macroeconomic and financial issues meeting (F4 meeting) to review domestic and international markets. From left: Lee Bok-hyun, Governor of the Financial Supervisory Service, Lee Chang-yong, Governor of the Bank of Korea, Kim Bum-seok, Acting Minister of Strategy and Finance and First Vice Minister, Kim Byung-hwan, Chairman of the Financial Services Commission. Photo provided by the Ministry of Strategy and Finance

The government announced that it will accelerate the resolution and restructuring of some real estate project financing (PF) sites where the resolution of insolvency is still insufficient. Given the ongoing uncertainty due to the tariff policies of the Donald Trump administration and the volatility in the bond market, both domestic and international markets will continue to be monitored.

Kim Bum-seok, Acting Minister of Strategy and Finance and First Vice Minister, held a macroeconomic and financial issues meeting (F4 meeting) on the 23rd with Lee Chang-yong, Governor of the Bank of Korea, Kim Byung-hwan, Chairman of the Financial Services Commission, and Lee Bok-hyun, Governor of the Financial Supervisory Service, and delivered the following message. First, the meeting participants evaluated that the efforts to restructure real estate PF have achieved meaningful results in guiding an orderly soft landing. Since Taeyoung Construction's workout application in 2023, the government has classified PF sites nationwide into sound, caution, alert, and insolvent categories and has been pursuing tailored measures.

However, it was stated that the speed of resolution and restructuring will be increased for sites where insolvency resolution is still insufficient. Plans for this will continue to be discussed at the F4 meeting.

It was assessed that external uncertainties remain due to recent tariff negotiations between the US and major countries. In particular, it was noted that the volatility of the US and Japanese bond markets is expanding. On the 21st, the 20-year Japanese government bond yield rose to 2.575% at one point, the highest since October 2000. On the same day, the 30-year US Treasury yield closed at 5.092%, the highest level since the end of October 2023.

Participants stated, "We will closely monitor the impact on the domestic financial and foreign exchange markets, centering on the F4 meeting."

Reporter Nam Jung-min peux@hankyung.com