S. Korea unveils measures to buffer economy from builders' bankruptcies

SEOUL, Oct. 31 (Yonhap) -- South Korea's financial watchdog said Friday the government unveiled emergency measures to minimize the negative impact on the economy of local builders' possible bankruptcies.

"The government is preparing comprehensive measures to prop up the broader
economy ... It plans to take action as soon as possible by drawing up measures to
protect subscribers and subcontractors of builders," the Financial Services
Commission said in a statement.
The remarks came as a South Korean construction firm is rumored to face
first-phase bankruptcy after failing to repay promissory notes on Friday,
sparking worries that more local builders may go belly-up amid the slowing
economy and a credit crunch.
Some smaller builders, which borrowed mostly from savings banks during the
housing market boom, are suffering from financial burdens caused by the tightened
credit conditions.
The possible bankruptcies of construction firms are feared to dent the soundness
of local financial institutions, which have already faced dollar shortages.
In late October, the government said it plans to spend around 9 trillion won
($6.93 billion) to boost the country's sluggish construction sector and revive
the broader economy.