Seoul mulls all viable means to finance corporate overhaul

The South Korean government and the central bank agreed to review all viable measures, including the launch of a recapitalization fund, to finance the ongoing corporate restructuring, the finance ministry said Thursday.

In the second meeting of a special task force between the Ministry of Strategy and Finance and the Bank of Korea, the two shared the view that the lending resources of policy lenders, such as the Korea Development Bank, should be increased to help facilitate much-needed corporate restructuring in Asia's fourth-largest economy, according to the ministry.

The finance ministry said the participants discussed options, including the BOK's role in chipping in to a fund to be launched later aimed at recapitalizing state-run banks.

The government-led task force was set up in the midst of rising public calls for the thorough overhaul of troubling industrial sectors, including the shipbuilding and shipping segments.

KDB and other policy lenders, which are the biggest creditors and shareholders of such ailing companies, including Daewoo Shipbuilding & Marine Engineering Co., need large amounts of capital increases to implement corporate revamps.

The government has increasingly demanded the BOK use its exclusive rights to print new bank notes and purchase debts sold by the policy lenders, but the central bank has adamantly opposed the move.

The finance ministry said the government and the BOK will seek the best policy mix to achieve the goal and focus on minimizing the financial burden on taxpayers.

The panel will work to make its final proposal before the end of the first half of 2016, it added. (Yonhap)