Financial regulator mulls oversight body for corporate restructuring

SEOUL, Dec. 1 (Yonhap) -- South Korea's financial regulator said Monday it is considering setting up a body to oversee corporate restructuring as an economic recession that has already impacted builders spreads to other industries.
In a meeting with reporters, Jun Kwang-woo, chairman of the Financial Services
Commission (FSC), said the government is reviewing a plan to launch an
organization similar to the so-called Corporate Restructuring Committee that
operated in the wake of the financial meltdown a decade ago.
The committee, comprised of financial and credit evaluation experts, played a
decisive role in determining the fate of businesses when there were disputes
between companies and their creditors regarding debt restructuring plans.
The move by the FSC comes amid concerns that the ongoing economic slump is set to
make a big dent on shipbuilding, automaking and other sectors already suffering
from a cash shortage.
The financial regulators and the government are already operating special task
forces that advise troubled companies on corporate restructuring to help them
ride out the credit crunch.
South Korea has announced a series of steps to reduce the effect of the global
slowdown, including US$16 billion in loans to ease a dollar shortage among firms
that import raw materials and export goods.
The Bank of Korea also said last week it would supply up to five trillion won in
liquidity for a planned 10 trillion won fund to stabilize the bond market.
Lenders have been increasingly reluctant to extend loans, especially to smaller
firms, as credit dries up while the export-led economy slows down. Corporate
bankruptcies hit a three-year high in October.
sam@yna.co.kr
(END)