[EDITORIAL] 40 Trillion Won Is Not Enough?

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[EDITORIAL] 40 Trillion Won Is Not Enough?

Remarks that the additionally procured 40 trillion won ($31billion) in public funds for corporate bailouts is insufficient are dumbfounding. Following the comment made by Park Seung, chair of the committee in charge of the management of public bailout funds, that "the additionally set 40 trillion won in public funds is insufficient," reports poured in calling for an augmentation of the funds to compensate for the 500 billion won in assets found lacking in addition to the initial estimations of the assets of Hanaro Investment Bank, a bridge institution set up to liquidate ailing investment banks. It is true that Mr. Park has announced his intention "to circulate collected money, if possible, instead of newly setting" funds. The government is also said to have disclosed plans to appropriate the additional funds for Hanaro from other sources within the 40 trillion won.

Such "excuses" made by Mr. Park and the government are reasonable. Not only is the public fund balance estimated to be considerable, but the necessary funds are highly susceptible to the movement of stock market and the profitability of financial institutions. It is therefore clearly premature to discuss the excess or deficiency of the funds. Nonetheless, my heart sinks at remarks claiming the funds' insufficiency, because it could certainly be true. If Hyundai Group, unconditionally injected with bailout funds by the government, collapses, setting supplementary funds would be indispensable. It is also worrisome that the government may still maintain its easygoing policy on public funds.

Additional public funds should not be set. When a second round of public funds was being requested, we had asked for a scrupulous inspection into the causes of the failures, because only then could we have blueprints attesting the necessity for the 40 trillion won and the financial institutions' feasibility for normalization. But the government did not conduct thorough probes. Eventually, it resulted in the Hanaro bank's deficiency in assets. The government should now make efforts to maximize the collection of injected funds and circulate them to make up for the needed supplementary funds. If a Hyundai Group bankruptcy leads to the procurement of additional public funds, the government should definitely take responsibility and plead for the people's consensus. Such justifications as "because the minister changed" or "because of unexpected events, as with Daewoo" are not acceptable.

Therein precisely lies the reason for the high expectations on the probe into public funds by the Board of Audit and Inspection launched on Monday. While parliamentary inspections and hearings on public funds should definitely be resumed, the Board of Audit and Inspection should carefully conduct its special audit of 98 public and individual financial institutions injected with public funds. The recent incident surrounding Korea First Bank's stock option is an example that testifies to the negligence of the government's management of the funds. The audit board should not only reckon with the financial institutions' loose morals, but specifically inquire into the adequacy of the allocation and infusion of public funds, the failure of government policies, illegal acts of the corporations, such as the concealment of bad credit, and inconsistent government policy as is seen in the repeated bailout of Hyundai, while Dong-Ah was allowed to go bankrupt. The board should bear in mind that disclosure of cases of loose morals of financial institutions without the above probes would only intensify the people's call for parliamentary inspections.
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