[Editorial] No way to curb financial disorder?

With the New Year only a few days away, the nation's banks have found themselves in the eye of a tempest.

Failed financial institutions are being incorporated into large-scale holding companies, big, viable banks are being merged and the remainder face an uncertain future.

Although the institutional restructuring of the financial sector is unavoidable, forcing the general public to shoulder the bulk of the shock is far from acceptable. Following the Christmas holiday season, should the crisis in the financial sector remain unabated, a truly unimaginable crisis may befall the business sector and the people of Korea.

On Saturday, the day after the unexpected announcement of the merger between Kookmin Bank and Housing & Commercial Bank (H&CB), many of those who sought to deposit bank notes issued by the two banks at other institutions found themselves unable to do so. Those seeking to withdraw their wired paychecks at the two banks found it impossible. Such a lack of preparation for any contingencies on the part of the banks provides further evidence of the lack of proper management at the banks.

The merger itself is not necessarily a bad thing. Although the pace of the marriage, at the behest of the government, is understandable, management seems to have failed to make adequate preparations and is now looking on helplessly as the employees engage in a massive strike. The government, which is the major shareholder, must impose strong countermeasures on banks which visit untold inconvenience on the Korean people through mismanagement and strikes.

The claim by the striking union members is also understandable. Although they are the sacrificial lambs for the salvation of the national economy, each individual faces a great personal loss as well as the loss of collective pride in having become victims of a merger at the two banks, which they had kept viable. However, should the labor union find itself mired in a political power struggle that hampers cash flow, something that generally quickens toward year-end, and leads to deeper financial crisis, the strikers will face a flood of criticism.

Domestic banks must admit their inefficient management, which is evidenced in the fact that profitability at the banks per employee reaches a mere half of the levels at developed nations' banks.

Accordingly, merging the banks is an absolute necessity for the very survival of the financial system. With the government having chosen this course in the face of many obstacles, it must stand behind its decision in order to prevent yet another economic crisis. The government must come to terms with the great disappointment felt by both the people and foreign investors due to its indecisiveness.

The government, bank management and labor unions carry the responsibility of finding middle ground in order to minimize the damage and maximize the benefits of the merger.