Korea Deposit Insurance Corp.Should Elect CEO Quickly

The Korea Deposit Insurance Corporation has been effectively non-operational for one month since former CEO Nam-gung Hoon moved to another position leaving the CEO seat vacant.

The Korea Deposit Insurance Corporation is supposed to play a pivotal role in financial restructuring. The Investment Trust support policies announced on May 9 were made on the assumption that the Korea Deposit Insurance Corporation would arrange the financial supply. The policy was made by the Ministry of Finance and Economy or Financial Supervisory Commission (FSC), but the policy cannot be implemented without the Korean Deposit Insurance Corporation's assistance. Therefore, the Korean Deposit Insurance Corporation cannot help being negligent of its duties.

The corporation originally prepared more than $38 billion in public financing to support financial restructuring. However, the $38 billion is almost used up. Therefore, the corporation should urgently sell its assets or borrow money. Given the absence of a CEO, the corporation cannot do its job.

The Korea Deposit Insurance Corporation is often compared to the Korea Asset Management Corporation due to similarities in spending public funds, but the contrast lies in the fact that the Korean Asset Management Corporation has gradually been paid back its loans, worth more than $535 million.

This fact might result from different characteristics between the two institutions: the Korean Asset Management Corporation possesses a vast amount of highly marketable assets, whereas the Korean Deposit Insurance Corporation does not. However, it has been pointed out that the Korean Deposit Insurance Corporation has less capability in its management due to its lacking a CEO.

Concerning the unwarranted securities which recently raised controversy, the corporation cannot make reports to the government due to the absence of a CEO. One employee expressed his concern that the Korean Deposit Insurance Corporation could become insolvent due to the burden of paying back interest if the firm issues unwarranted securities.

In response to this remark, Kwon Soon-hyun of the Daewoo Economic Research Institute stated that the government does not seem to understand how serious this is.

The government should listen to critics that the delayed promotion would decrease the reliability of the government in the market.

by Joo Jung-wan