[EDITORIALS]Poor discipline at the banksSeveral banks that were bailed out by the government, including Kookmin Bank and Woori Bank, were found by the Board of Audit and Inspection to have awarded their executives and employees excessive incentive bonuses and stock options. Public funds are given out of the taxpayers’ pockets to financial institutions whose independent survival is questionable. These banks need to use the funds thriftily. Conditions for these banks improved a little, and they violated regulations by distributing billions of won to their executives and employees. This is clear evidence that slack discipline remains widespread.
The banks argue that they did not break the rules. Productivity and profitability rose by some measures. But rewarding employees who had nothing to do with the performance or granting hundreds of billions of won without meeting expectations deserves criticism for exploiting loopholes.
In itself, for Kim Jung-tae, chairman of Kookmin Bank, to take pretax capital gains of 16.5 billion won ($13.8 million) by exercising stock options does not raise legal issues. But disposing of hundreds of thousands of shares and taking huge profits, when the bank was buying its own stock to lift the plunging share price does pose ethical problems for a chief executive. The overly spacious and luxurious offices of the chairmen of these banks are likewise good examples of indiscipline.
Many questions were raised over indiscipline at financial institutions during the restructuring of the sector, but things have hardly improved. This is truly worrisome. Union workers at Chohung Bank, which also received government funds, recently staged an illegal walkout to protest the proposed sale of the bank. This shows that bank workers still hold on to outdated ideas.
The growth and transparency of the financial industry is an urgent task for our economy. To achieve this goal, correcting loose discipline is as urgent as advanced tactics. This will be possible when strict government supervision and the good sense and professionalism of each participant are in place.