ID :
38887
Mon, 01/05/2009 - 13:48
Auther :
Shortlink :
http://m.oananews.org//node/38887
The shortlink copeid
Korea's top regulator calls for swift revamp of struggling firms
SEOUL, Jan. 5 (Yonhap) -- South Korea's top financial regulator on Monday called
on local lenders to restructure troubled companies as quickly as possible in
order to ensure the supply of much-needed funds to viable firms.
Local banks have been slow in forcing failing companies out of the market, which
government policymakers say such swift action is necessary to head off an
economic crisis.
The financial watchdog said on Dec. 23 that the government will seek to overhaul
struggling construction companies and shipbuilders starting in January, to
prevent fallout from their potential bankruptcy from spilling over into the real
economy.
"The local banking sector should aggressively back up efforts to revive the
slowing economy by supporting well-managed companies suffering a temporary
liquidity squeeze while expediting the swift restructuring of unhealthy firms,"
Jun Kwang-woo, chairman of the Financial Services Commission said in his New Year
message to leading officials at financial firms.
Analysts say a swift corporate revamp would give local lenders room to lend money
to companies which are quite healthy, but facing a temporary credit squeeze due
to the faltering economy.
South Korean banks have been increasingly reluctant to lend money to companies
and households as the deepening economic slump and a credit crunch are increasing
the amount of bad debt.
"It is the time (for local banks) to beef up their fundamentals and health
because only when they can secure adequate capital can they play a role in
contributing to overcoming the economic crisis," Jun added.
The government is seeking to set up a 20 trillion won fund (US$15.4 billion) this
month aimed at helping lenders increase the capital basis. The fund will be used
to buy preferred stocks, subordinated bonds and hybrid debt sold by lenders.
sooyeon@yna.co.kr
(END)
on local lenders to restructure troubled companies as quickly as possible in
order to ensure the supply of much-needed funds to viable firms.
Local banks have been slow in forcing failing companies out of the market, which
government policymakers say such swift action is necessary to head off an
economic crisis.
The financial watchdog said on Dec. 23 that the government will seek to overhaul
struggling construction companies and shipbuilders starting in January, to
prevent fallout from their potential bankruptcy from spilling over into the real
economy.
"The local banking sector should aggressively back up efforts to revive the
slowing economy by supporting well-managed companies suffering a temporary
liquidity squeeze while expediting the swift restructuring of unhealthy firms,"
Jun Kwang-woo, chairman of the Financial Services Commission said in his New Year
message to leading officials at financial firms.
Analysts say a swift corporate revamp would give local lenders room to lend money
to companies which are quite healthy, but facing a temporary credit squeeze due
to the faltering economy.
South Korean banks have been increasingly reluctant to lend money to companies
and households as the deepening economic slump and a credit crunch are increasing
the amount of bad debt.
"It is the time (for local banks) to beef up their fundamentals and health
because only when they can secure adequate capital can they play a role in
contributing to overcoming the economic crisis," Jun added.
The government is seeking to set up a 20 trillion won fund (US$15.4 billion) this
month aimed at helping lenders increase the capital basis. The fund will be used
to buy preferred stocks, subordinated bonds and hybrid debt sold by lenders.
sooyeon@yna.co.kr
(END)