No public fund without restructuring

From now on, the financial institutions to receive public funds must make public the memorandum of understanding (MOU) which was concluded with the government on the obligations of the management reform and submit the letter of approval on the content of the MOU from the related trade unions. And these financial firms should not employ the officials of the Korea Deposit Insurance Corporation (KDIC) and appointees of the corporation.

Finance-Economy Minister Jin Nyum reported the public fund system improvement plan including this to the National Assembly Finance-Economy Committee on Tuesday, disclosing that the government would promote the revision of the depositors protection law and the deposit guarantee corp. law with a plan to enforce them on a gradual basis.

Noting that the financial institutions would be obligated to upgrade the financial ratios goals and if they fail to do so, they would face coercive steps such as the wage freeze, the minister said that in order to ensure the structural reform due to unionists' objections, the institutions would be obliged to attach the letters of unionists' consents to their applications for the public funds.

The ministry plans to include the ceilings of the public funds support in the MOU. And if they fail to implement their self-rescue programs, the fund supply will be discontinued and their management punished and the institutions merged with other sound financial organizations.

At the same time, the related officials of the KDIC, the Financial Supervisory Service (FSS) and the prosecution will be dispatched to the public fund injected institutions take charge of their legal problems and strengthen the punitive actions against their nonviability.

The Public Fund Management Committee will be composed of six members from the government, including the Finance-Economy minister, Financial Supervisory Commission chairman and Bank of Korea governor, and nine civic members to be recommended by the administration, legislature and judicature.