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[Editorial] Systematic Failure is Responsible for “Credit Card Crisis?”

[Editorial] Systematic Failure is Responsible for “Credit Card Crisis?”

Posted July. 16, 2004 22:16,   


An inspection by the Board of Audit and Inspection (BAI) proved that the credit card policy failure as a whole was the main culprit for the credit crisis. In order to prop up domestic demand and secure tax resources, it was necessary to promote the use of credit cards. However, the government watchdog agency concluded that the failure in taking preventive measures and the negligence in supervising financial authorities were to blame. The point the agency made should serve as a reference to avoid a repeat occurrence.

However, it is hard to accept that the agency attributed the policy failure only to a weak financial supervisory system and held only the Financial Supervisory Service Deputy Governor responsible among the relevant ministerial officers. In fact, it is natural to believe that the inspection was only to acquit officials in charge of planning and executing policies from the blame that they caused a credit crisis. It also proves that it is nonsense that the government has singled out flaws in the system as the main cause to the problems not only in diplomatic but also in economic policies.

The failure in the credit card policy has caused a huge pain for both average citizens and the nation’s economy. With the number of people with bad credit ratings growing, countermeasures taken by the government have only caused financial disorder by expanding moral hazard among financial authorities. The government could not even stop the vicious cycle of having failed to promote spending. In this situation, the government still blames such a phantom as the financial system for the crisis.

The government watchdog agency should be careful for holding someone responsible for the policy failure. Why has the chairperson of BAI, Jeon Yun-chul, focused on “the policy inspection?” At least, we need to ask the former ministers of Finance and Economy and former BAI chairmen, including Lee Kyu-sung, Kang Bong-kyun, Lee Hun-jai, Jin Nyum, Jeon Yun-churl, Kim Jin-pyo, Lee Yong-keun, Lee Geun-young and Lee Jung-jae, who is responsible for the crisis. If it is hard to ask who is responsible since they have already left the office, the concerned party may just make a public apology.

If the inspection on the card crisis, which has provided the economy with an enormous burden, continues to show its defects, who would be willing to take charge in government position with the risk of a huge burden? Even if the government will introduce a great financial system in the future, without reform in authorities, failure will be repeated.