South Korean Reforms Start With Banks --- Think Tank Says Financial Restructuring Will Lead Corporate Revamp

The Korea Development Institute, a South Korean state-run think tank, said Friday that the government should support financial-sector reforms but shouldn't intervene in corporate restructuring. "The government shouldn't intervene to help lower debt-to-equity ratios of companies . . ....

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Bibliographic Details
Published inThe Wall Street journal Asia
Main Author By Cecilia Kang, Chang Woo Hyuk And Shin Jung Won of
Format Newspaper Article
LanguageEnglish
Published Victoria, Hong Kong Dow Jones & Company Inc 11.05.1998
Subjects
Cooperation
Financial institutions
Financial services
GDP
Gross Domestic Product
Participating loans
Recapitalization
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Summary:The Korea Development Institute, a South Korean state-run think tank, said Friday that the government should support financial-sector reforms but shouldn't intervene in corporate restructuring. "The government shouldn't intervene to help lower debt-to-equity ratios of companies . . . the government should concentrate on the financial sector," KDI Fellow Cho Dong Chul said at a press conference in Seoul. "The financial sector should then lead corporate reforms." The KDI economists said the government should sort out insolvent and sound institutions and begin recapitalization of financially sound banks. Banks deemed insolvent and unviable should be allowed to collapse, they said.
ISSN:0377-9920