Eximbank pledges financial support for 26 companies to be affected by Japanese regulations

24, Jul. 2019

SEOUL, AJU - At least 26 South Korean companies related to semiconductors, displays and smartphones are expected to suffer immediate and indirect damage from Japan's export regulations, the Export-Import Bank of Korea, an official export credit agency said, based on a business survey.

Korea Eximbank chairman Eun Sung-soo said Tuesday that he would endorse the supply of more funds to companies to be affected by Japan's trade retaliation. “If there is a problem, there are plans to do something like the supply of liquidity.”

Japan strengthened regulations on exports of photoresists, fluorine polyimide and etching gas on July 4. Officials and business leaders have expressed concern about irrecoverable trade relations between Seoul and Tokyo if Japan takes additional measures, including the removal of South Korea from a so-called “white list” of trusted importers. Moon has warned of strong countermeasures.

At a parliamentary committee on Tuesday, Bank of Korea Governor Lee Ju-yeol expressed concern about Japan's possible retaliation in the financial sector. “We need to make efforts to prevent financial retaliation,” he said, adding a vulnerable social group has borrowed money from Japanese savings banks and loan businesses doing business in South Korea.

“It is true that in terms of numbers, the amount of investment in loans and securities by Japanese financial institutions is not large as Japanese funds account for about two percent of foreign capital,” Lee said. “There will be many other unexpected effects that numbers alone can't explain if financial retaliatory measures are taken.”