Gov"t to Accelerate Restructuring for Financial Companies

The government will accelerate the restructuring for non-banking financial companies this year.
According to the plan, merchant banks that turn out to be insolvent after their year-end accounting and audit is tallied at the close of this month will be shut down immediately. At that point, if those banks are unable to increase their capital, they will be liquidated.
In this context, insolvent merchant banks are those whose liabilities are greater than their combined assets.
The government announced on March 12 that it fully agreed with the IMF's restructuring program for non-banking financial companies.
Accordingly, this year the government will take the scalpel to financial institutions, and many will not survive the operation, as indeed was the case with bank restructuring last year.
As of now, the government is forecasting that two or three merchant banks will be liquidated.
The government is forcing investment companies to come up with 1.8 trillion won which it mobilized through investment funds, as securities firms will have to accumulate customers' money separately from their own assets.
The government set targets of two percent economic growth and a three percent rise in the consumer price index while maintaining its current policy of low interest rates.