ID :
39608
Thu, 01/08/2009 - 22:19
Auther :
Shortlink :
http://m.oananews.org//node/39608
The shortlink copeid
Gov`t to supply US$38 bln in liquidity to smaller firms this year
(ATTN: RECASTS headline; ADDS more info in paras 4,7-10)
SEOUL, Jan. 8 (Yonhap) -- South Korea will seek to provide about 50 trillion won
(US$38 billion) in new funds to smaller companies this year to help them cope
with cash shortages amid a slumping economy, the financial watchdog said
Thursday.
Smaller local companies are suffering from a liquidity squeeze as banks have
become wary of lending to them due to mounting bad loans.
"The government will push to supply more than 60 percent out of the planned funds
to smaller companies in the first half when a severe downturn is expected," the
Financial Services Commission (FSC) said in a statement.
The move comes as the result of decisions made at the first meeting of the
presidential emergency economy management council, which was set up to cope with
the fast slowing economy.
The watchdog said it will expand its debt guarantee capacity by state-owned
credit guarantee agencies to 25.2 trillion won this year from 13.5 trillion won
in 2008 in a bid to help reduce risk burdens in lending to smaller firms.
Two state-owned banks -- the Korea Development Bank and Industrial Bank of Korea
-- also plan to increase loans to small and medium enterprises (SMEs) by a
combined 44 trillion won this year, it added.
"The government plans to make efforts to provide ample liquidity to SMEs swiftly,
but not all firms will get it," Jun Kwang-woo, chairman of the FSC, told
reporters. "The government will push to restructure non-viable companies while
pumping liquidity to firms which are suffering from temporary cash shortages."
Local banks have been receiving conflicting requests from the government to boost
much-needed credits to smaller businesses and to bolster the falling capital
adequacy ratio at the same time.
The average capital adequacy ratio of 18 commercial and state banks came in at
10.86 percent as of the end of September, down 0.5 percentage point from three
months earlier.
A total of 18 local banks' loans to SMEs rose 52.4 trillion won on-year to 422.4
trillion won as of the end of last year, according to the watchdog. In December,
such lending decreased 1.8 trillion won.
sooyeon@yna.co.kr
(END)
SEOUL, Jan. 8 (Yonhap) -- South Korea will seek to provide about 50 trillion won
(US$38 billion) in new funds to smaller companies this year to help them cope
with cash shortages amid a slumping economy, the financial watchdog said
Thursday.
Smaller local companies are suffering from a liquidity squeeze as banks have
become wary of lending to them due to mounting bad loans.
"The government will push to supply more than 60 percent out of the planned funds
to smaller companies in the first half when a severe downturn is expected," the
Financial Services Commission (FSC) said in a statement.
The move comes as the result of decisions made at the first meeting of the
presidential emergency economy management council, which was set up to cope with
the fast slowing economy.
The watchdog said it will expand its debt guarantee capacity by state-owned
credit guarantee agencies to 25.2 trillion won this year from 13.5 trillion won
in 2008 in a bid to help reduce risk burdens in lending to smaller firms.
Two state-owned banks -- the Korea Development Bank and Industrial Bank of Korea
-- also plan to increase loans to small and medium enterprises (SMEs) by a
combined 44 trillion won this year, it added.
"The government plans to make efforts to provide ample liquidity to SMEs swiftly,
but not all firms will get it," Jun Kwang-woo, chairman of the FSC, told
reporters. "The government will push to restructure non-viable companies while
pumping liquidity to firms which are suffering from temporary cash shortages."
Local banks have been receiving conflicting requests from the government to boost
much-needed credits to smaller businesses and to bolster the falling capital
adequacy ratio at the same time.
The average capital adequacy ratio of 18 commercial and state banks came in at
10.86 percent as of the end of September, down 0.5 percentage point from three
months earlier.
A total of 18 local banks' loans to SMEs rose 52.4 trillion won on-year to 422.4
trillion won as of the end of last year, according to the watchdog. In December,
such lending decreased 1.8 trillion won.
sooyeon@yna.co.kr
(END)
