Document Type

Case Study

Case Series

Market Support Programs

JEL Codes

G01, G28


The spread of the COVID-19 pandemic in the early months of 2020 strained liquidity in short-term corporate funding markets around the world. In response, the Korean government enacted a variety of direct and indirect measures to promote the smooth flow of credit to households and businesses. Most of these measures focused on highly rated companies. Recognizing the need to extend assistance to lower-rated issuers, the Bank of Korea (BoK) invoked its authority under Article 80 of the Bank of Korea Act to establish and fund the Corporate Liquidity Support Organization, Co., Ltd., a special-purpose vehicle (SPV) authorized to purchase up to 10 trillion Korean won (KRW) (USD 8.3 billion) of corporate bonds, commercial paper (CP), and short-term bonds that did not meet the eligibility criteria for other support programs. The SPV began purchasing securities on July 14, 2020, accumulating a total of KRW 4.0 trillion worth of corporate bonds and CP by the end of July 2021. Although the SPV was initially scheduled to purchase assets for six months from the date of establishment, the BoK extended the timeframe twice to end on December 31, 2021.

Date Revised