MOFE draws up contingency plan for public funds

The government has begun drawing up a contingency plan against the possibility that the National Assembly¡¯s approval for its plan to raise public funds in a second round is delayed.

The Finance and Economy Ministry (MOFE) said Monday that if approval for raising public funds worth about 40 trillion won set for Thursday is delayed due to partisan conflicts, the Deposit and Insurance Corporation will take out bridge loans from commercial banks and repay them after the approval is given.

However, assuming that there are limits in raising funds in the form of bridge loans, the government is also considering injecting public funds. As public funds are urgently needed, the ministry cited investments worth 8.3 trillion won to Seoul Guarantee Insurance, and 6.1 trillion won to six banks undergoing restructuring and 17 trillion won for merging four insolvent merchant banks and liquidating the Hanarum Merchant Bank.

A ministry official said that the delayed raising of public funds would cause a lot of problems but more worrisome than that is that foreign investors may think Korea¡¯s determination to reform is fading and lose interest in the domestic market.