Gov"t to Support Formation of "Bad Banks"

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Gov"t to Support Formation of "Bad Banks"

The government intends to support the setting up of 'bad banks' by the banking sector, which would serve the function of handling the outstanding debts of banks.
A source at the Ministry of Finance and Economy (MOFE) explained that the Ministry plans to abolish various institutional and bureaucratic bottlenecks in the process of setting up the so-called 'bad banks'.
Private banks have continuously asked the government to approve the formation of the bad banks in order to solve their massive outstanding debts.
The Ministry will essentially extend the same priviledges to the privately-run 'bad banks' as it does to the Korea Asset Management Corporation, a public institution which deals with all outstanding debts of financial companies.
Many banks including Kookmin and the Housing Bank are actively considering setting up their own independent 'bad banks' as subsidiaries.
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