Gov't policy-makers also to blame

Executives of insolvent financial institutions that have obtained public funds are expected to be punished. The Prosecutors' Office is planning to accuse a total of 1,009 bank executives on criminal charges.

Of those who will be charged, 721 are likely to lose their entire property because they are involved in a civil case for compensation of 394.7 billion won. While raising additional public funds, the government is going to press hard those who are responsible for the insolvency.

The Ministry of Finance and Economy and the Financial Supervisory Commission, after announcing the plan to inject an additional 40 trillion won of public funds into the banking sector, raised their voices that those who are responsible for the insolvency should be treated strictly. However, they did not question the failure of the policy.

Is there no accountability in the government? A bank executive who was accused of criminal charges complained that most bank executives were requested by government officials for financial arrangements.

In fact, the government is suspected of controlling the financial institutions with invisible hand. For promotion, bank executives are required to understand what's government officials really want.

It is embarrassing to see the situation of investment-trust companies. Is the insolvency of the nation's major investment-trust companies such as Korea and Daehan simply due to their poor management capability? The government used to name high-ranking officials for managerial positions at investment-trust companies. It used the positions as means to solve the government's problems of stacked promotion. Also, it ordered the selling or buying of stocks depending upon the market situation.

Of course, that doesn't mean that bank executives hold no responsibility for the institutions' insolvency. Nevertheless, the policy-makers who triggered the insolvency are far from taking responsibility, so it is not fair.

Even in the process of asking who is responsible for the failure in sales of Hanbo Steel and Daewoo Motor, only civilians are mentioned as scapegoats. An official at the Ministry of Finance and Economy said that the Board of Audit and Inspection always is monitoring what the government does. It sounds like a narrow-minded excuse.

Choi Young-Hae moneychoi@donga.com