S. Koeran Banks Say Government Crisis Policy is 'Near-Sighted'

South Korea's commercial banks called the financial policies by the government introducing stimulus packages at their cost as "near-sighted."

A bank official complained that they are being asked to provide more loans to the self-employed who are in crisis and allow individual investors to delay interest rates payments.

Most lenders in South Korea, beginning as early as 2021, are expected to feel the negative impact in their earnings due to the government's stimulus measures.

Consequently, global rating firm Fitch Ratings revised the rating outlooks on KB Kookmin Bank and Shinhan Bank from 'Stable' to 'Negative' due to the pressure exerted by the government on the banks' operating environment, asset quality and profitability.

Yonsei University economist Sung Tae-yoon said the government should mediate between the banks and virus-hit parties as any one-sided demand is not desirable even in a time of crisis.

Sung pointed out that commercial banks are not state-run organizations, but companies with shareholders.