Senior regulatory officials are considering the timing of the announcement of the list of debt-saddled savings banks, which will face business suspension.
In particular, the officials seem extremely cautious over choosing the date as the Financial Services Commission and the Financial Supervisory Service will come under parliamentary audit next week.
The primary issue of the scheduled audit on the two regulators must be oversight of the ailing secondary banking sector.
The National Policy Committee of the National Assembly is set to conduct inspection on the FSC and the FSS next Tuesday and Friday, in turn. The two regulators will also be under simultaneous audit on the same day in the coming weeks.
“Our announcement is imminent,” an FSC official said. He cited the timetable of the parliamentary audit as a factor in deciding the date.
In the first half, the FSC and the FSS were sternly reprimanded by lawmakers for incurring market woes as they failed to block internal information leaks when they suspended several savings banks.
“Internal controlling is tighter than any other time to keep the list confidential before it is open to the public,” an FSS official said.
He said there is a possibility that the list will be unveiled on the weekend, adding that “announcement during working hours could bring greater woes in the market.”
In February, a group of VIP customers of Busan Savings Bank withdrew large deposits a day ― or several days ― before regulators halted operations of the distressed bank.
It has been alleged that key staffers of Busan Savings Bank had been informed of the rumor that regulators would soon suspend the operations.
Despite the spreading rumor ahead of the business suspension, it has been found that officials in the FSS Busan office failed to take necessary measures to block the massive withdrawal by the chosen-few customers.
About 10 savings banks have been on the close watch list of financial regulators for their poor financial statements.
The regulator found that about 10 savings banks saw their BIS capital adequacy ratio stay below 1 percent, demonstrating their critically weak financial status.
While they are potential candidates for business suspension, the FSS has instructed them to submit plans for management normalization as soon as possible.
Large-sized banks, such as Tomato Savings Bank and Solomon Savings Bank, have already gone into self-restructuring movement by moving to sell insolvent assets or buildings.
In its efforts to revamp the industry tarnished by the corruption scandals involving some banks, the FSS has probed 85 savings banks across the country.
By Kim Yon-se (
kys@heraldcorp.com)
