Gov`t to raise over 10 trillion won in public funds this year

To support the ongoing reform in the financial sector, the government plans to raise over 10 trillion won of additional public funds. Moreover, the outside director system will receive a facelift with reinforced qualifications and work performance standards for outside directors.

Finance-Economy Minister Jin Nyum, speaking today at the government complex in Gwacheon in the first briefing session on economic trends, asserted that the amount of additional public funds to be raised will be based on the self-rescue proposals from the six financial institutions to be submitted at the end of this month. However, the minister added that it would exceed 10 trillion won. The minister said that there would be no attempt to reduce the amount of public funds necessary.

He went on to note that the target banks to be injected with public funds will be determined during Octoberbased on an independent study by a review committee. At the same time, the ministry will determine which banks will be left to revive on their own and which will be integrated into a financial holding company. The minister added that it is not always a wise decision to merge two super banks to create a mega-bank under the direction of the government.

Touching on the previously injected public funds, the minister emphasized that the corresponding banks or supervisory institutions will be held liable if any problems emerge.

Moreover, he pointed out that the current outside director system is not fulfilling its task of independently monitoring the transparency and partiality of the management. Thus, the minister plans to improve the system by taking into consideration international and Korean standards after its evaluation.