BOK to focus on banking restructuring

The governor of the Bank of Korea told the opening session of the Institute of International Finance annual convention that he will concentrate on speeding up restructuring in the banking sector for the sustained growth of the Korean economy. He was on hand at the IIF meeting that opened in the Czech Republic on Sunday.

¡°The overall state of the Korean economy is healthy, but there are lingering misgivings in the local market about the successful completion of the ongoing banking and corporate restructuring,¡± he said, ¡°And soaring oil prices have contributed to the deterioration of the situation.¡±

The top bank official from Seoul disclosed a plan to introduce a system of bank holding companies and a partial deposit guarantee, as well as a bid to generate public funds required for managerial normalization and the restructuring of financial institutions by clearing their bad loans.

The governor added that in monetary policy, priority will be placed on stabilizing prices and the money market as economic stability is crucial for the Korean economy to maintain an adequate level of growth. He emphasized that inasmuch as a small and open national economy, for all its sound fundamentals, could face a crisis as a result of unsettled international banking and violent fluctuations of capital flow, stability in the external environment and a proactive and cooperative posture from the international financial community are essential.