Gov"t to Invest into Chohung and Kookmin Bank

The government plans to invest two trillion won into Chohung and Kookmin Banks to increase the BIS capital-adequacy ratio of the two banks to the level of 10%. In order to receive this support, Chohung Bank should have large scale reduction of its capital, lay off a considerable number of its employees, and dispose of its subsidiaries.
The Financial Supervisory Commission (FSC) will form countermeasures to deal with problem banks. It has yet to decide the scale of support but 1.5 trillion to 1.8 trillion won for Chohung Bank and 500 billion to 700 billion won for Kookmin Bank are expected. The FSC will approve Chohung's acquisition of Kangwon and Chungbuk Banks but ordered them to reduce two thirds of their high ranking executives and sell off their subsidiaries. Furthermore, the FSC halted all plans to induce foreign capital injections that Chohung Bank was attempting.
The FSC will invest funds into Kookmin Bank without any prior conditions. A source at the FSC said, 'We will remove the uneasiness felt in financial markets by quickly disposing of Chohung's acquisition of Kangwon and Chungbuk Bank.'