Deposit insurance limit to rise

Minister of Finance and Economy Jin Nyum said that partial protection of bank deposit will be implemented from next year as scheduled and that the government would study ways of raising the limit on bank deposit insurance, which is now limited to 20 million won per person.

Also, Jin noted that it wasn`t desirable to integrate insolvent financial institutions under a holding company, adding that the government would contribute additional public fund into financial reform by obtaining approval from the National Assembly.

Minister Jin also said explained the policy direction of the ministry, a day after he was appointed as finance-economy minister.Referring to the deposit protection system, Jin said that it would be implemented starting next year under the principle of loss-sharing and prevention of moral hazards, although details would be examined if they produce undesirable results. He added that the subjects under review would include increasing the limit for deposit protection.

Some insolvent banks and other financial institutions have been asking the government to raise the limit for deposit protection, as they could face serious operational problems in line with abrupt shifting of funds to blue-chip banks with implementation of the deposit protection system.