IMF favors ceiling for deposit insurance

Debates are hot both at home and abroad over the projected introduction of a partial deposit insurance system, which is scheduled to be implemented in January next year.

The International Monetary Fund set forth an opinion that it would be desirable for the system to be implemented, even revising the ceiling upward, it was learned Tuesday.

¡°The IMF maintains a very flexible position on this system,¡± Lee Chong-Koo, financial policy bureau chief at the Ministry of Finance and Economy, said Tuesday. ¡°We are not clinging to the opinion that the ceiling will be set at 20 million won from next year. We found that even if Korea postpones implementation of this system, the IMF would not oppose it strongly.¡±

The government and IMF, in a letter of intent on policy signed last year, agreed that it would examine the trend in the financial market prior to the implementation of the partial deposit insurance system. The agreement is based on a premise that the formula will be enforced.

Meanwhile, Samsung Economic Research Institute claimed that the implementation of the partial deposit insurance system should be postponed.

¡°If the second round of financial restructuring and the partial deposit insurance system are carried simultaneously, the financial market might become uneasy, and then, not only bad financial institutions, but also good ones might go bankrupt,¡± the institute said.