Financial restructuring price tag high

Standard & Poor`s, the international credit rating firm, estimates that Korea might need 140 trillion won in additional funds to complete financial restructuring.

Also, the ratings agency pointed out that among Korea¡¯s chaebols, or conglomerates, restructuring is focused on just rolling over matured debts or converting debt into equity rather than reducing total liabilities, noting that the result will be a delay in restructuring.

The International Finance Center reported that S&P, in its evaluation of financial systems of major countries around the world, adjusted the estimated cost for Korea`s financial restructuring upward to 140 trillion won, or 29% of the nation`s gross domestic product, from the previous 120 trillion won.

The Ministry of Finance and Economy has noted that the estimate is close to what the government has budgeted for financial restructuring, as it already has invested about 102 trillion won, including 64 trillion won of public funds it collected from financial institutions. The ministry noted that the government would devote an additional 30-40 trillion won to the process next year.