BuseongKang: 12-14-일

N. Korea not likely to get energy aid without verification regime: State Dept.

By Hwang Doo-hyongWASHINGTON, Dec. 12 (Yonhap) -- The U.S. State Department Friday reiterated that North Korea will not get promised energy aid unless it agrees to a verification protocol of its nuclear facilities under an aid-for-denuclearization deal. "Fuel shipments, yeah, will not go forward absent a verification regime," spokesman Sean McCormack said. "There's one in train with the Russians, but I think there is an understanding among the parties -- I guess the five parties, the exception being North Korea -- that fueloil shipments will not go forward absent progress."The U.S., South Korea, China, Japan and Russia are supposed to provide 200,000 tons of heavy fuel oil to North Korea each in exchange for the North's disablement of its nuclear facilities in the second phase of the six-party denuclearization agreement. About half has been delivered. On the suspension of heavy fuel oil shipments, McCormack said North Koreans "understand that, yes."During the just-concluded six-party talks in Beijing, North Korea refused to sign an agreement on a verification protocol, including taking samples from its main nuclear reactor in Yongbyon, north of Pyongyang, saying the sampling should take place in the third and final phase of the denuclearization process. North Korea's chief nuclear negotiator, Kim Kye-gwan, also said Wednesday that the North would not accept the sampling in the face of a hostile U.S. policy. Kim's remarks are in stark contrast to those of Christopher Hill, U.S. assistant secretary of state, who said the North had agreed to the sampling verbally in October when he visited Pyongyang. The outgoing Bush administration delisted the North afterwards as a state sponsor of terrorism amid criticism that it was accepting a weak agreement to make a rare diplomatic achievement in its waning months. McCormack said Hill is back home and discussed the matter with Secretary of State Condoleezza Rice. "He's going to continue his consultations with respect to the six-party talks," the spokesman said. "And I would also just reiterate one point that we made yesterday, and that is that this is an action-for-action process."White House press secretary Dana Perino Thursday said the administration regrets that North Korea failed to agree to the verification regime, saying, "There was an open door, and all they had to do was walk through it."Analysts say the North has no intention of dealing further with the outgoing Bush administration, and is awaiting the inauguration of Barack Obama. In an apparent effort not to provoke the North further, U.S. officials stopped short of threatening to put the North back on the terrorism list, citing legal procedures. Reports said North Korea may stop disabling its nuclear facilities again, as it did in August, if oil shipments stop. Despite a clock ticking down to Jan. 20, when Bush is replaced by Obama, McCormack expressed hope for a development. "In the meantime, Chris, for example, will continue his consultations with the South Korean counterparts, with Japanese, Russian and Chinese counterparts as well," he said. "So that possibility exists that the process can move forward."hdh@yna.co.kr(END)

Chinese captain, crew sentenced to jail in Korea

INCHEON, Dec. 12 (Yonhap) -- A South Korean court handed down jail terms to the captain and two crewmen of a Chinese fishing boat on Friday for assaulting Korean Coast Guard officers who tried to inspect their boat that was illegally fishing in Korean waters. The captain was sentenced to two-and-a-half years in prison and fined 6 million won (US$4,351). The Incheon District Court also sentenced two crewmen to a year-and-a-half in prison, while two others who played a relatively minor role in the assault were handed a year-and-a-half jail term, suspended for two years. "The defendants not only pillaged the property of the Republic of Korea, but also committed an unforgivable act against public authority," Judge Ham Sang-hun said. The Chinese nationals were charged with interfering with Korean Coast Guard officers' official duties and attacking two of them with blunt weapons in the early morning of Oct. 7. They were operating inside Korea's exclusive economic zone, 45 nautical miles off Socheong Island off South Korea's west coast, when the officers approached. The captain planned the illegal operation, ordered his crewmen to block the officers from boarding and assaulted them himself, the court said, explaining the harsher sentence against him. Korea has intensified efforts to crack down on illegal Chinese fishing, but the practice is still rampant and sometimes threatens the lives of inspecting officers. An inspector of the Mokpo Coast Guard, Park Kyong-jo, was assaulted and drowned while trying to inspect a Chinese boat operating in Korean southern waters in September.

(LEAD) Ex-president's key supporter arrested in corruption probe SEOUL, Dec. 12 (Yonhap) -- A key supporter of former President Roh Moo-hyun was sent to a detention center on Friday after a court issued a warrant for his arrest on allegations of tax evasion, insider trading and bribery. Park Yeon-cha, chief of shoe manufacturer and Nike outsourcing firm Taekwang Industry Co., was the centerpiece of prosecutors' months-long probe into suspected corruption by associates of the previous liberal administration. Roh's older brother, Roh Gun-pyeong, was arrested last week on bribery allegations. "Considering the gravity of the issue and the current stage of the probe, it can be acknowledged that he should be detained for the investigation," Judge Hong Seung-myeon of the Seoul Central District Court said, granting the warrant to the prosecution. Park is suspected of evading 29 billion won (US$21 million) in capital gains taxes, pocketing 20 billion won in profits from a brokerage house prior to its takeover announcement and handing over 2 billion won in bribes to the chief of the state-run conglomerate National Agricultural Cooperative Federation, or Nonghyup, to acquire a Nonghyup affiliate at a bargain price between 2005 and 2006. Park admitted to evading taxes, but denied the other allegations. "I admit to tax evasion," Park told reporters as he was transported to a Seoul detention center. "But there was no bribery ... It's hard to talk now, and I will present all details in court." The probe has been a sharp blow to former President Roh, who while in office prided himself on eliminating bribery and sought to distance himself from his predecessors, whose names were tarnished by scandals involving relatives. Investigators believe hometown connections touched off the corruption scandal. In 2006, the state-run giant Nonghyup took over a troubled brokerage house, Sejong Securities Co., overturning its initial position to not absorb a financial unit amid efforts to slim down its super-sized business. Roh Gun-pyeong, Park and the Nonghyup's chief at that time, Chung Dae-kun, are hometown acquaintances, and investigators suspect they created the takeover scenario for mutual benefit. Roh Gun-pyeong is suspected of influencing Nonghyup in the sale of Sejong Securities and accepting bribes from Sejong's lobbyists. The Taekwang chief, Park, was allegedly informed of the looming takeover and bought Sejong shares en masse half a year before the takeover was sealed. Sejong shares jumped when news of the takeover broke. Nonghyup bought Sejong for 110 billion won in January 2006. Park is also suspected of acquiring Nonghyup's chemical manufacturing affiliate, HU-CHEMS, for 145.5 billion won, some 7 billion won less than what was offered by another bidder. Through his paper company in Hong Kong, prosecutors allege that Park evaded capital gains taxes on his murky proceeds. Liberals argue the incumbent Lee Myung-bak government may be seeking to score political points against the ex-president, who still hurls acerbic criticism at Lee's free market policies and hard-line position on North Korea. Trying to dispel the accusation, prosecution spokesman Choi Jai-kyeong said earlier this week, "There is no ulterior motive behind our investigation."Roh retired to his rural hometown of Bonghwa in South Gyeongsang Province in February.

Lee heads to Japan for regional summit talks By Yoo Cheong-moSEOUL, Dec. 13 (Yonhap) -- South Korean President Lee Myung-bak on Saturday left for the Japanese city of Fukuoka to hold tripartite summit talks with Japanese Prime Minister Taro Aso and Chinese Premier Wen Jiabao. Lee will hold separate bilateral talks with Aso and Wen to discuss pending issues, including closer cooperation on the global economic crisis and widening cultural and personnel exchanges, said the presidential office Cheong Wa Dae. At the three-way talks slated for Saturday afternoon, the leaders plan to adopt a joint statement pledging to deepen trilateral cooperation in overcoming the global financial crisis and denuclearizing North Korea, officials at Cheong Wa Dae said. The three leaders are expected to agree on reinforcing existing currency swap deals concluded between their countries and accelerate a separate agreement with Southeast Asian nations to create an US$80 billion joint fund by next June to cushion the region against the financial crisis. On Friday, South Korea's central bank announced agreements with its Japanese and Chinese counterparts to expand the ceiling of their respective foreign currency credit swap lines to $30 billion. South Korea, faced with a weakening won and declining foreign exchange reserves, has long sought to expand its foreign currency swap lines with the U.S., Japan and China. According to the officials, the three leaders are also expected to discuss regional follow-up measures for the agreements reached at the Group of 20 summit held in the U.S. last month before exchanging opinions on the agenda for the next G-20 summit slated for April 2 in London. Following the tripartite talks, the leaders will sign an accord on anti-disaster cooperation and hold joint meetings with youth representatives and reporters from the three countries. Lee will return home late Saturday night. The Fukuoka meeting will be the first three-way summit talks to be held separately from multilateral international forums. The three countries have met annually on the sidelines of the Association of Southeast Asian Nations Plus Three summit. They had originally intended to meet in Japan in September, but the plan was scrapped due to the sudden resignation of then Japanese Prime Minister Yasuo Fukuda.

(3rd LD) S. Korea signs new currency swaps with China, Japan SEOUL, Dec. 12 (Yonhap) -- South Korea reached new currency swap agreements with China and Japan in an effort to help stabilize the foreign exchange market in case of an emergency, the Bank of Korea (BOK) said Friday. The BOK said it sealed a won-yuan swap line worth US$26 billion with the People's Bank of China. The South Korean central bank has currently a $4 billion credit line with the Chinese counterpart. The BOK said it also agreed with the Bank of Japan (BOJ) to expand its existing won-yen swap facility to $20 billion from $3 billion. South Korea has a $13 billion swap line with Japan. The swap deal with China will be effective for three years with a possibility of an extension through agreement, while that with Japan will be in effect until the end of April 2009, it said. The moves will raise the total swap lines with the BOJ and the People's Bank of China to $30 billion each. "The new swap deals will serve as a safety valve for the local currency market and help Korea brace for a worst-case scenario amid the financial turmoil," Rhee Gwang-ju, a deputy governor at the BOK, told a press conference. "The decision reflects concerted efforts by the three nations to bring stability to the region and ease liquidity shortage woes."On Oct. 30, the BOK announced a $30 billion currency swap agreement with the U.S. Federal Reserve, tapping $7 billion out of the swap line so far. The local currency posted its largest daily gain against the dollar in 11 years on the same day. Government officials hailed the new deals, saying they will help deal with and stave off a financial crisis. "We welcome swap expansion deals," Shin Je-yoon, deputy finance minister for international affairs, told reporters. "The decisions are the results of close cooperation among the three countries and shared efforts to tackle the financial crisis in the Asian region."Market watchers said the move will have a positive effect on the financial market. "South Korea's expansion of currency swap agreements with Japan and China will help ease some jitters about falling foreign exchange reserves and a weaker won. But as the news has already been factored into the market, the impact of the won's gain would be limited," said Jeon Seung-ji, a currency analyst at Samsung Futures Inc. Despite the news, the local currency closed at 1,372.5 won to the greenback, down 14 won from Thursday's close as dollar demand remained strong after the U.S. Senate rejected a bailout plan for the ailing auto industry. The latest move comes amid a dollar shortage in the local financial market, which has been impacted by the collapse of U.S. investment bank Lehman Brothers Holdings Inc. The local currency has fallen about 32 percent against the U.S. dollar so far this year. Concerns have been mounting over South Korea's foreign exchange reserves, the world's sixth-largest, as they declined for the eighth straight month in November due to liquidity injections designed to ease an ongoing credit crunch and financial jitters. The foreign reserves totaled $200.51 billion as of end-November, down $11.74 billion from a month ago. South Korea has pumped $31.9 billion into the local financial system over the past two months from a planned $55 billion to ease the frozen credit market.

S. Korea halts beef imports from U.S. slaughterhouse SEOUL, Dec. 12 (Yonhap) -- South Korea halted beef imports from a U.S. packinghouse Friday after finding it has repeatedly shipped spoiled meat, the quarantine agency said. Est 969, a slaughterhouse of Swift Beef Co. in Greeley, Colorado, faced the sanction after spoiled beef was found in three of its shipments sent since November, said the National Veterinary Research and Quarantine Service. A total of 2,466 tons of beef has been imported from the packinghouse since July. According to quarantine rules between South Korea and the U.S., Seoul can suspend imports until corrective measures are taken if spoiled shipments from the same factory are found twice. "Some of the shipments were suspected to have gone bad because the temperature was not properly maintained in the import process," an official of the agriculture ministry said. Japan reportedly suspended imports from the same slaughterhouse last month after finding it had shipped beef that was improperly labeled on its export certificate. Korea banned all U.S. beef imports in December 2003 after a case of mad cow disease was confirmed in the state of Washington. It began allowing imports of boneless cuts in April 2007, but again halted quarantine inspections in October of that year after backbones were discovered among the imports. Seoul and Washington signed a revised sanitation agreement in April this year allowing most beef cuts to be imported, with the exception of specified risk materials. The two governments later modified the deal to stipulate that all beef must be from cattle under 30 months old following massive nationwide protests in Korea against the agreement.

Pacific nations agree to 30 pct cut in tuna catches by 2011 BUSAN, Dec. 12 (Yonhap) -- Pacific nations on Friday agreed to cut their tuna catches by 30 percent and ban fishing in international waters to protect tuna reserves, South Korean officials said. The 25 members of the Western and Central Pacific Fisheries Commission adopted a resolution at the end of their annual meeting in the southern port city of Busan to cut bigeye tuna catches by 30 percent over the next three years, they said. Major catchers like South Korea and Japan called for a more gradual cut, while the United States, Canada, Australia and New Zealand backed the resolution, they said. Europe called for an even sharper reduction. The resolution also bans bigeye tuna catches in international waters surrounding the member countries starting in 2010. Korea and Japan protested, saying it is against international law to prohibit catching the highly migratory species of bluefin tuna in international waters, but their argument was not accepted, officials said. The resolution also prohibits purse-seine fishing vessels, which use long nets to encircle tuna, from throwing fish-aggregating devices from August to September in 2009. The period expands to three months in 2010. The Western and Central Pacific Fisheries Commission is the central decision-making body for management of tuna fishing in the Western and Central Pacific Ocean. Member countries reached the resolution after fierce debate at the end of their six-day meeting, officials said. An official of the Ministry for Food, Agriculture, Forestry and Fisheries said Korea sought to slow the banning process out of concern for its fisheries industry, but "in the final stage of the meeting, other fishing nations changed their position to be positive about the ban and (South Korea) had to give in."Environmentalists called for more. "We support the fishing ban in international waters, but it's still not enough with the 30 percent cut in tuna catches," Choi Su-yeong, director of the Korean Federation for Environmental Movement, said. "We will continue our campaign to stop tuna overfishing for the sake of sustainable fishing."hkim@yna.co.kr
(2nd LD) Parliament passes 284.5 tln won budget for 2009 SEOUL, Dec. 13 (Yonhap) -- The National Assembly passed on Saturday morning a 284.5 trillion won (US$206.8 billion) budget bill for 2009 despite strong resistance from the main opposition party. The 2009 consolidated budget, which includes the government's general and special accounts and public funds, represents a 11.05 percent gain from this year's budget of 256.17 trillion won.

Legislators from the ruling Grand National Party (GNP) and two minority parties voted for the bill, while lawmakers from the main opposition Democratic Party (DP) boycotted the vote in a show of defiance. The bill's passage marks the first time since 2005 that parliament has approved the budget with the main opposition party lawmakers absent. Parliament missed the official Dec. 2 deadline for the budget as it failed to bridge a widening partisan divide. The GNP pushed for tax cuts and increased spending to bolster the economy, while the DP demanded changes to the scope of both those initiatives in light of bleak growth projections. On Monday, the two parties agreed to settle the budget bill by Friday amid fierce objections from the Democratic Labor Party, a progressive minority party. Rival parties failed to agree, however, on a budget increase of 4.3 trillion won to create jobs and a social safety net, which was demanded by the DP in talks that lasted until early Saturday morning. The government plans to frontload its scheduled 2009 budget spending in the first half of next year to cushion the impact of a deepening economic downturn, said an official at the Ministry of Strategy and Finance, who asked not to be identified.

Korean financial firms may face losses from Wall Street swindle SEOUL, Dec. 13 (Yonhap) -- More than ten South Korean financial firms may suffer investment losses from an alleged US$50 billion fraud led by a big-time U.S. financier, industry sources said Saturday. On Thursday, the U.S. Federal Bureau of Investigation arrested Bernard Madoff, former chairman of the Nasdaq Stock Market, on charges of securities fraud in what is called a Ponzi scheme, a pyramid-type swindle that promises early investors with high returns with money from newcomers. According to sources, more than ten local financial institutions including Korea Life Insurance Co. may face at least $100 million in losses after investing in hedge fund Fairfield Sentry Ltd. which entrusted Madoff's investment securities firm with billions of dollars. "We are checking which company has invested in this hedge fund," said an official at the Financial Supervisory Service, the country's financial watchdog.

Presidential office vows swift budget execution By Yoo Cheong-moFUKUOKA, Japan, Dec. 13 (Yonhap) -- The office of South Korean President Lee Myung-bak on Saturday welcomed the parliamentary approval of the government's budget bill for next year, reiterating its determination to quickly execute fiscal expenditures to overcome the economic crisis. "The government will do its utmost to weather the unprecedented economic crisis by efficiently utilizing the parliament-approved budget bill," presidential spokesman Lee Dong-kwan said in a statement. "Viewing the parliamentary approval as a public wish for swift economic recovery, the government will make an all-out effort to create more job opportunities, extend greater support to small and medium-sized companies and take better care of the people's livelihoods," said the statement. Earlier on Saturday, the South Korean National Assembly approved a 284.5 trillion won (US$206.8 billion) budget bill for 2009 in a plenary session boycotted by the main opposition Democratic Party. The party has called the Lee government's infrastructure projects "excessive" and said its tax cut plan will only benefit the nation's wealthy. The budget bill voting was attended only by the ruling Grand National Party, which controls two-thirds of the parliamentary seats, and two minority parties. President Lee was visiting Japan on Saturday to attend a tripartite summit meeting with Japanese Prime Minister Taro Aso and Chinese Premier Wen Jiabao. Lee will return home late Saturday night. According to the presidential spokesman, President Lee will preside over a series of economy-related Cabinet and expanded policy meetings between Sunday and Thursday to discuss follow-up measures to the parliamentary budget's passage. On Sunday, Lee will meet with a group of 15 economy-related ministers for intensive discussions on job creation and economic revitalization. On Tuesday, the president will again meet with the economy ministers and his economic policy advisers to address similar agenda items. Lee is also set to receive the 2009 macroeconomic policy briefing from the Ministry of Strategy and Finance and other relevant ministries on Thursday, about one month earlier than in the previous years, in line with the president's push to implement economic stimulus measures as soon as possible. The Ministry of Strategy and Finance has already announced a plan to use 60 percent of its annual fiscal spending in the first half of next year as part of its effort to swiftly revitalize the slumping real economy. ycm@yna.co.kr

(LEAD) China urges N. Korea to resume dialogue with S. Korea By Yoo Cheong-moFUKUOKA, Japan, Dec. 13 (Yonhap) -- South Korean President Lee Myung-bak and Chinese Premier Wen Jiabao agreed to further strengthen bilateral cooperation in forcing North Korea to abandon its nuclear program during their bilateral talks here on Saturday, Lee's office said. Lee and Wen also expressed regret at the breakdown of the latest session of the six-party talks, which were held in Beijing earlier this week on verification measures for the North's nuclear declaration, according to the office. "Lee explained the latest circumstances on the Korean Peninsula, while Wen stressed the two Koreas should attempt to improve relations through dialogue and negotiations. The Chinese leader then offered continued support for better inter-Korean relations," said the office in a statement. "The two leaders expressed regret for the failure of the six countries (South Korea, North Korea, China, Japan, the U.S. and Russia) to produce an agreement on measures to verify the North's nuclear program," said the statement. The Lee-Wen meeting came ahead of a tripartite summit that will also involve Japanese Prime Minister Taro Aso. The China-hosted six-party talks have agreed in principle to scrap North Korea's nuclear program in return for aid and diplomatic benefits. But the latest session of the talks broke down on Thursday after North Korea refused to accept a Chinese draft verification plan that called for nuclear inspectors to be able to remove samples from North Korean nuclear sites for outside analysis. Meanwhile, Lee and Wen agreed to reinforce a bilateral currency swap deal and deepen policy cooperation in overcoming the global financial crisis and in working out multilateral policy measures at the Group of 20 summit scheduled to take place in London next April. On Friday, South Korea's central bank announced agreements with its Japanese and Chinese counterparts to expand the ceiling on their respective foreign currency credit swap lines to $30 billion. South Korea, faced with a weakening won and declining foreign exchange reserves, has long sought to expand its foreign currency swap lines with the U.S., Japan and China. "Lee expressed gratitude for China's decision to expand its currency swap line with South Korea, while Wen declared his government's strong commitment to backing the South Korea-China currency swap deal," Lee's spokesman Lee Dong-kwan said. "Wen displayed his wish for an immediate opening of free trade talks between South Korea and China, while voicing deep concern about slowdown in global trade following the outbreak of the financial crisis."Lee and Chinese President Hu Jintao have already held three rounds of summit talks in May and August. During their first summit in Beijing in late May, Lee and Hu agreed to upgrade Seoul-Beijing relations from a "comprehensive cooperative partnership" to a "strategic cooperative partnership." The two leaders met again on Aug. 9 in Beijing, after Lee attended the opening ceremony of the 29th Summer Olympics there. In their third meeting held in Seoul on Aug. 25, Lee and Hu issued a joint summit statement vowing to significantly deepen bilateral political, economic, cultural and personnel exchanges to follow up on the strategic cooperative partnership.

Bickering Mars Final Day of Regular Parliamentary Session

DECEMBER 10, 2008 05:28

The Land, Transport and Maritime Affairs Committee of the National Assembly last week planned to bring up a bill on merging Korea National Housing Corp. and Korea Land Corp, an important test of the government’s reform plan.
Bickering between the ruling and opposition parties, however, resulted in the bill on the merger failing to be presented to the standing committee yesterday, the end of the regular parliamentary session.
The National Assembly finished its 100-day annual regular session. Lawmakers promised to make all-out efforts to revive the economy but failed to generate visible results.
At the session, only 13.7 percent of pending bills were handled. Hong Joon-pyo, floor leader of the ruling Grand National Party, said Nov. 11, “If the government does not suggest bills swiftly, we’ll not handle them in the regular session.”
Facing pressure from Hong, ministries rushed to suggest bills, but only 66 out of 482 suggested by the government were handled in the regular session.
The 18th National Assembly proclaimed itself an “economy parliament” but parliamentary committees on national policy, finance and land, all of which mainly deal with economic issues, handled less than 10 percent of pending bills. The policy committee handled 13 out of 153 bills (8.5 percent), that of finance 23 of 255 (nine percent), and that of land 10 of 261 (3.8 percent).
Worse the parliamentary committee on education dealt with three of 126 bills (2.4 percent); that of culture three of 118 (2.5 percent); and that of public administration 17 of 299 (5.7 percent).
Instead the ruling and opposition parties had engaged in political bickering until Tuesday, the last day of the regular session.
Hong said, “The opposition party should withdraw its unreasonable demands and interference.”
Main opposition Democratic Party leader Chung Sye-kyun hit back by saying, “We have a different view on the budget plan and anti-democratic laws.”
Leaders of the two rival parties failed to show their leadership due to the complicated parliamentary structure. The ruling Grand National Party has a majority of 172 seats but has failed to get along with the main opposition party since the 18th National Assembly began.
The ruling party was busy fighting the opposition instead of handling suggested bills. The Democratic Party also failed to abide by the parliamentary principles of conversation and compromise.
The 18th National Assembly had also proclaimed itself a tool of the people. It now faces harsh criticism since it began 81 days later than scheduled and must rush to inspect government offices and examine public spending of last year and the budget for next year.
Won Hye-young, floor leader of the Democratic Party, expressed his will to improve the process of auditing government spending and the budget.
“The Special Committee on Budget and Accounts will become a standing committee. Through this, lawmakers can deal with the government’s budget and spending plans throughout the year instead of handling them over the last few weeks,” he said.
[Editorial] Ruling Party Conspiracy for Budget Abuse?

NOVEMBER 03, 2008 09:28

Lawmakers of the ruling Grand National Party belonging to the National Assembly`s Special Committee on Budget and Accounts are found to have submitted a list of social overhead capital projects for their constituencies to their party’s budget committee, which reportedly secretly encouraged its lawmakers to submit the list. The party is planning to hand over the list to the Planning and Finance Ministry, which is in charge of the budget, to reflect their lawmakers demands on the budget bill.
One lawmaker asked for 73.9 billion won (57.2 million U.S. dollars) for eight infrastructure projects, such as expansion of a national highway. Another requested 52.6 billion won (40.7 million dollars) for four projects, such as construction of a road. The question is, will the party’s 29 budget committee members seek more money for their constituencies to help economic revival or simply advance their political careers?
In a desperate measure to overcome the crisis by soothing the pain of the working people and companies badly hit by the severe economic slowdown, the Lee Myung-bak administration has even neglected its previous principle of a small government in expanding the budget. Naturally, next year’s revised emergency budget will have to be used for areas absolutely necessary for stimulating the economy, new growth engines and projects to help low-income earners.
The government is not expanding the budget because of a surplus. As the administration says, tax revenues are not sufficient enough to cover the proposed additional budget of 10 trillion won (7.7 billion dollars), leaving no choice but to issue government bonds to make up the shortfall. The people will be the ones who will eventually shoulder the cost.
If lawmakers collude to increase pork barrel and unnecessary projects, stretched fiscal spending will only burden the people further rather than achieve the goal of overcoming the economic crisis. Lee Hahn-koo, chairman of the budget committee, has warned against pork barrel projects, saying, “We have to evaluate whether the increased budget is used for productive projects.” Now is not the time to party with the emergency budget. Ruling party lawmakers must not consider the increased budget as booty from their victories in the presidential and general elections. They should instead exercise more caution and get even stricter on budget spending if they have the slightest idea of the people’s difficulty.
The Korean economy has been hit hard by the shock of the global financial crisis because of the government`s clumsy responses, quickly losing the people’s trust. They have shown no signs of regret. Instead, they have been seeking to spend the budget as lavishly as possible. Was this what the party waited to do after spending 10 years as the opposition? The party chairman and lawmakers must rule out pork barrel projects.
[사설] 경제 비상 예산 나눠먹기 작당하는 한나라당

20081102192437

NOVEMBER 03, 2008 09:28

국회 예산결산특별위원회 소속 한나라당 의원들이 자기 지역구의 사회간접자본(SOC)사업 목록을 당 예결위 전문위원실에 전달한 것으로 드러났다. 당 전문위원실은 의원들에게 목록 제출을 독려하면서 이를 절대 대외비로 분류했다고 한다. 당 측은 이 목록들을 예산 주무부처인 기획재정부에 고스란히 건네 예산안 편성에 반영시킬 계획이다.
A 의원은 지역구의 국도 확장 등 8개 SOC사업에 739억 원의 예산을 요구했다. B 의원도 지역구의 도로 건설 등 4개 사업에 526억 원을 반영해달라고 했다. 한나라당 예결위원 29명이 내 지역에서 힘 자랑 하기 위한 예산을 이렇게 끼워 넣으면 경제 및 민생 위기 극복에 도움이 될까, 아니면 거꾸로 일까.
이번에 증액되는 내년도 수정 예산안은 경제위기 탈출을 위한 비상예산이다. 이명박 정부가 작은 정부 원칙을 포기하면서까지 예산을 늘리기로 한 것은 극심한 경기 침체에 따른 기업 서민 등의 고통을 다소나마 덜어줘 위기 상황에서 넘어서기 위한 고육책이다. 당연히 비상 예산은 경기부양을 위해 꼭 필요하거나 미래의 성장 동력이 될 사업, 서민들의 생활고를 덜어주는데 도움이 되는 분야에 집중 투입해야 옳다.
국가 재정에 돈이 남아돌아서 예산을 늘리는 것도 아니다. 정부가 밝힌 대로 10조원이 넘는 예산을 증액하려면 세금으로는 모자라기 때문에 국채를 발행해 빚을 내는 도리밖에 없다. 그 부담은 국민 모두의 몫이다.
의원들의 담합으로 예산이 선심성 또는 낭비성 사업에 많이 쓰이게 되면 재정 지출 확대를 통한 경제위기 탈출이라는 목표는 멀어지고 민생의 고통은 더욱 커질 수밖에 없다. 이 한구 예결위원장은 늘리는 예산이 생산적이냐 아니냐를 따져야 한다며 나눠먹기 예산을 배격할 것이라고 다짐한 바 있다. 예결위원들이 경제위기 탈출 예산에 젓가락을 대고 먹자판을 벌일 때가 아니다. 평상시보다 더한 긴장감과 각오로 예산안 심의에 임해도 모자랄 판에 경제위기 탈출 예산을 대선과 총선 승리의 전리품 정도로 여기는 것은 경제난에 허덕이는 국민은 안중에도 없다는 태도다.
정부와 여당은 글로벌 금융위기 대응에 서툴러 경제에 충격을 키웠고 국민의 신뢰를 잃었다. 이 마당에 반성은 하지 않고 10년간 야당을 하면서 예산 배정에서 밀린 한풀이라도 하겠다는 것인가. 한나라당 대표와 전체 의원은 국민 앞에 예산 나눠먹기 포기 선언을 하라.
Pork Barrel Projects Feared From Higher Nat`l Budget

NOVEMBER 03, 2008 09:28

Controversy over pork barrel spending is likely to erupt in the wake of a move by advisers from the ruling Grand National Party.
The party’s advisers to the National Assembly`s Special Committee on Budget and Accounts recently sent a “confidential” e-mail to 29 party lawmakers on the committee to submit budget proposals on social overhead capital projects in their respective constituencies.
President Lee Myung-bak last week requested measures for fiscal expansion in a speech to the National Assembly to revive the ailing economy, raising fears that the extra spending could go to fund pork barrel projects of party lawmakers in their constituencies.
The advisers sent an e-mail titled “Urgent Notice (highly confidential)” to the aides of party lawmakers on the committee Thursday, reminding them to submit budget proposals to the advisers on SOC projects by Friday morning.
“The types of SOC projects are limited to those for extensive sewage systems, national roads, expressways, ramps to industrial complexes, alternate roads, metropolitan subways, subways, railways, and railways in large metropolitan areas,” the sender of the e-mail obtained by The Dong-A Ilbo said.
“Projects near completion are preferred, and those that must start from scratch have a low chance of being approved.”
The majority of the 29 committee members from the ruling party submitted details on projects needing extra funding at the end of last month. Many were SOC projects relevant to their constituencies, with funding requests of more than 10 billion won in many cases.
Certain members included new projects in their proposals, such as building sports facilities. The advisers will soon collect the proposals and deliver them to the Strategy and Finance Ministry.
An aide to a committee member said, “We submitted the details of the budget needed for our projects to the special advisers after receiving a phone call urging us to submit our proposals as soon as possible, so that they can be reflected in the government’s revised fiscal plan for next year.”
Another aide said, “At a time when the government plans to speed up SOC projects, it will be in the interest of both the government and the ruling party to fund projects in the ruling party’s constituencies.”
“The economic crisis obliges us to take caution, but such a practice has been customary for quite some time.”
On the e-mail, Ha Yun-hee, one of the special advisers to the committee, said, “We sent out the e-mail to committee members to ask for their ideas in helping regional development at the working level. This was not officially initiated by the party and the details of project proposals have not been delivered to the Strategy and Finance Ministry.”
The government will submit a revised budget plan for next year to the National Assembly to ask for an additional 10 trillion won (7.7 billion U.S. dollars) to supplement the original budget of 273.8 trillion won (212 billion dollars). The goal is to create jobs and boost the economy by increasing SOC projects, especially those for roads, railways and water resources.

이 와중에 여예결위원 선심예산 늘리기

20081102190833

NOVEMBER 03, 2008 09:28
동정민 (ditto@donga.com)

한나라당 예산결산특별위원회 전문위원실이 최근 한나라당 국회 예결특위 소속 국회의원 29명에게 해당 지역구의 사회간접자본(SOC) 예산을 제출해달라는 대외비 e메일을 보낸 것으로 확인돼 선심성 예산 편성 논란이 일 것으로 보인다.
이명박 대통령은 지난달 27일 국회 시정연설에서 얼어붙은 경기를 살리기 위해 국회에 확대 재정 편성을 요청한 상태여서 재정확대 방침이 결과적으로 여당 의원 지역구에 집중적으로 사용되는 것이 아니냐는 우려가 일고 있다.
한나라당 예결특위 전문위원실은 지난달 30일 당 소속 예결특위원 보좌진들에게 긴급 알림(절대 대외비)이라는 제목으로 31일 오전까지 SOC 사업과 관련해 요청할 사항을 (전문위원실에) 제출해야 한다는 내용의 e메일을 보냈다.
본보가 입수한 e메일에는 (신청할 수 있는) 사업의 종류는 하수관거사업(대형 하수도관 사업), 국도, 고속도로, 산업단지 진입도로, 국도대체 우회도로, 광역전철, 지하철, 철도, 광역철도, 도시철도로 한정한다며 신규 사업은 반영이 어렵고 완공 소요 위주여야 한다고 적혀 있다.
한나라당 예결특위원 29명 중 상당수는 지난달 31일 증액이 필요한 사업 명세를 제출했다. 대부분은 자신의 지역구에 해당되는 SOC 사업으로 증액 요청액이 사업당 100억 원이 넘는 사례가 많은 것으로 알려졌다.
또 일부 예결특위원은 SOC 사업 외에 체육시설 등도 신청해 신규 사업도 상당수 포함됐다는 것이다. 당 예결특위는 신청 사업을 취합해 조만간 기획재정부에 전달할 예정이다.
한 위원 보좌관은 정부가 내년도 수정예산안을 짤 때 반영할 수 있도록 필요한 사업을 빨리 신청하라는 전화를 받고 전문위원에게 사업명과 함께 필요한 예산 명세를 제출했다고 말했다.
또 다른 위원 보좌관은 정부에서 SOC 사업에 속도를 내겠다고 하는 마당에 이왕이면 여당 의원 지역구의 사업을 하는 게 서로 좋은 것 아니냐며 경제 위기 때라 조심스럽기는 하지만 매년 관례상 이런 일이 있었던 것으로 안다고 말했다.
이에 대해 한나라당 하윤희 예결특위 전문위원은 전문위원실의 실무진 차원에서 지역 발전을 도울 수 있는 방법을 모색하다 예결특위 소속 위원들에게 아이디어를 구하는 차원에서 물어본 것이라며 당이 공식적으로 추진한 것은 아니며 재정부에 아직 위원들의 신청사업 명세도 전달하지 않았다고 해명했다.
정부는 최근 내년 예산안을 기존의 273조8000억 원에서 10조 원 이상 늘려 국회에 수정안을 내기로 했다. 특히 도로 철도 수자원 등 SOC 확충 예산을 늘려 일자리 창출과 경기부양을 꾀한다는 방침이다.

Editorial] Soft Landing of the Housing Market

NOVEMBER 04, 2008 09:27

The government has managed to quell fears over a financial crisis for the time being, but a new challenge has emerged: a slowdown in the real economy. To revive the real economy, it has introduced measures to boost the housing and construction markets by slashing regulations on redevelopment and reconstruction, and to encourage capital flow by advancing the construction schedule for social overhead capital projects in rural areas.
A comprehensive set of measures announced Monday seeks to expand the fiscal plan and reduce taxes at the same time, with the goal of pulling the real economy out of trouble. These will cost 14 trillion won (10.7 billion U.S. dollars), 10 trillion won (7.9 billion dollars) of which is for extra budget, three trillion won (2.3 billion dollars) for further tax cuts and one trillion (792 million dollars) for additional investment by state-owned enterprises. Together with financial support promised two weeks ago to construction companies worth nine trillion won (7.1 billion dollars) and existing tax reduction plans worth 10 trillion won, the government is projected to spend 33 trillion won (26.1 billion dollars) on pump-priming measures this year alone. This latest set of measures requires a huge sum of money that accounts for 3.7 percent of GDP, well above the average of advanced economies of two to three percent.
The government must keep in mind that massive spending will prove worthwhile in boosting the real economy only when efficiently distributed. If the money funds pork barrel projects as some have warned and public funds are poured into areas without urgency, the plan will be undermined. At the same time, the finance and construction sectors, which will receive state support, must undergo intensive internal restructuring to prevent moral hazard.
A hard landing of the housing market could send a huge shockwave throughout the real economy and the people’s livelihood. Sales have been plummeting for a long time and the glut of unsold houses has continuously pushed down prices. The government, however, failed to promptly respond to such problems to the disappointment of many households. Measures for unsold houses came after 251 construction companies went bankrupt by the end of September. Talk about bad timing. If construction companies, thrifts and banks become insolvent all at the same time, Korea could see its own version of a subprime mortgage crisis. This is why the government must take more aggressive action in the housing market.
Changes in regulations and market liquidity can send the housing market on a rollercoaster ride. Therefore the government must prevent a dangerous housing bubble from forming due to sudden deregulation and liquidity injection.
President Lee Myung-bak promised in a public address to prevent bankruptcy of well-performing small companies, alleviate burden on the working class, and create jobs for the disadvantaged. He also needs to meet the challenge of supporting exporters and strengthening the foreign exchange market to ensure that the current account balance, which posted a surplus last month, stays in the black well beyond October.

[사설] 경기대책 성패는 부동산시장 연착륙에 달렸다

20081103184727

NOVEMBER 04, 2008 09:27

외환위기 우려는 한 고비 넘겼지만 실물경제 침체가 본격화하고 있다. 정부는 실물경기를 살리기 위해 재개발 재건축 규제를 풀어 부동산과 건설 경기를 활성화하고, 지방의 사회간접자본(SOC) 공사를 앞당겨 돈이 돌게 한다는 전략이다.
113 경제위기 극복 종합대책은 재정 투입과 감세를 동시에 추진하는 종합대책이다. 재정 추가지출 10조 원, 추가 감세 3조 원, 공기업의 추가투자 1조 원을 합해 14조 원 규모다. 2주일 전 발표된 건설사 9조 원 지원과 감세 10조 원 계획을 합하면 올해 들어 경제위기 대책 규모는 33조 원에 이른다. 국내총생산(GDP)의 3.7%로 선진국의 23%보다 높은, 과감한 대책이다.
재정을 대규모로 풀더라도 효율적으로 배분돼야만 침몰하는 실물경기를 부양하는 데 도움이 된다. 이미 조짐이 드러난 것처럼 여당 의원 지역구의 불요불급한 사업에 돈을 쏟아 붓다 보면 종합대책의 의미는 반감되고 만다. 금융, 건설업계에 대한 지원도 불가피하다고 하지만 모럴해저드(도덕적 해이)를 걸러내고 강도 높은 자체 구조조정을 요구해야 할 것이다.
부동산 경기가 연착륙하지 못하면 실물과 민생 부분에 엄청난 충격을 줄 수 있다. 그동안 부동산 거래가 끊긴 지 오래됐고, 미분양 주택 누적으로 집값이 계속 떨어지는데도 정부가 손을 놓고 있다시피 한 것은 잘못이다. 9월 말까지 종합건설업체와 전문건설업체 251개가 부도를 낸 뒤에야 정부가 미분양 대책을 내놓은 것은 이만저만한 실기가 아니다. 건설사와 저축은행, 은행이 동반 부실화한다면 한국판 서브프라임 모기지(비우량 주택담보대출) 같은 재앙이 닥칠 수 있다. 정부가 더 적극적으로 대응해야 하는 이유다.
부동산 시장은 정부 규제와 유동성에 따라 온탕과 냉탕을 반복적으로 오가는 곳이다. 일시에 풀린 돈과 규제로 인해 부동산 시장에 과도한 거품이 끼지 않도록 감시할 필요도 있다.
중소기업의 흑자도산 방지와 서민 가계 및 취약계층의 일자리 지원은 이명박 대통령이 대국민 연설에서 약속한 대목이다. 10월 경상수지가 반짝 흑자에 그치지 않도록 수출기업도 챙겨야 하고 취약한 외환시장을 보강해야 하는 과제도 남아 있다.
South Koreans Switch to Soju, Cigarettes, Condoms to Save Cash
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By Heejin Koo
Dec. 11 (Bloomberg) -- South Korean stocks trader Kim Won Ho has cut down on his bar bill as the economy slows. He isn’t drinking less, he’s just switched to cheaper local soju rather than his usual 12-year-old Chivas Regal whiskey.
“We’re not getting any Christmas bonus this year and we’re worried about pay cuts or even layoffs,” said Kim, 37, at a pork-belly barbecue restaurant in Seoul, as a colleague poured the green bottle of liquor, distilled from potatoes, barley and other starches. “Whiskey is too luxurious for me now.”
The traders, who declined to identify their company to avoid embarrassing managers, are among millions of South Koreans who are cutting back on travel, food and entertainment as the global credit crisis drives down stocks and the won. The South Korean currency has slumped 31 percent this year, the second-worst performer of the 16 major currencies tracked by Bloomberg.
South Korea has pumped funds into the financial system, boosted public spending and trimmed interest rates to bolster an economy that grew at the slowest pace in four years last quarter. The Bank of Korea today cut its key interest rate to 3 percent from 4 percent. President Lee Myung Bak on Nov. 26 ordered that ministers come up with more measures to boost consumer spending.
South Koreans, Asia’s second-biggest alcohol consumers after Australians, bought 2.5 billion bottles of soju in the first nine months of this year, up 5.1 percent from a year earlier, according to the Korea Alcohol & Liquor Industry Association. That’s about six bottles a month for each person of drinking age.
Canceled Parties
In the same period, South Korea’s wine sales growth slowed to 25 percent, from 70 percent a year earlier, according to the Korea Wines & Spirits Importers Association. The association wouldn’t release figures for whiskey imports.
South Korean companies are also canceling year-end parties, usually held at hotels. A manager at a hotel in downtown Seoul said year-end reservations for corporate parties are down 40 percent from last year, and cancellations continue.
“Hotels in Seoul are really sensitive about this so they don’t want to tell the newspapers, but we hear it’s about the same at every hotel,” said the manager, who said he would be “out of a job” if his bosses knew he was speaking to the press about the cancellations.
Slimmer purses and more expensive ingredients have also hit restaurants. More than 181,000 restaurants closed in the first nine months of this year, according to the Korea Restaurant Association, more than double the number last year.
Duck Restaurant
“President Lee said he would get the banks to provide liquidity to family businesses like ours, but I didn’t see that happening at all,” said Kang Min Ho, smoking a cigarette as he watched workers disassemble the kitchen of his duck barbecue eatery in Shindang-dong near downtown Seoul, which closed this month. “We owe six months in back rent. I hope what I sell off from the kitchen is enough for that, but I seriously doubt it.”
The economic woes are helping sales of instant noodles called “ramyeon,” which typically cost about 68 cents a pot. Sales rose 38 percent in October compared with the same period last year, according to the 24-hour convenience store chain FamilyMart. Shares of Nong Shim, which makes the nation’s best- selling brand of ramyeon, gained 17 percent in the past month.
Cigarette sales rose 9 percent in the same period. KT&G Corp., the nation’s cigarette-making monopoly, has dropped 2.5 percent this year, compared with a 39 percent decline in the benchmark Kospi index.
Condom Sales Rise
Koreans worried about the cost of raising children in a recession are helping boost sales of condoms, according to GS25, another convenience store chain. Condom sales rose 17 percent in October and 24 percent in November, compared with the same months last year. According to a Nov. 20-27 survey by Internet site JobKorea, 45 percent of 689 married people without children said they were avoiding pregnancy because of the current economic woes.
“People are unsure of the future in these times of economic difficulty, and they want to avoid having children,” said Lee Dong Hoon, a consumer and marketing researcher at Samsung Economic Research Institute in Seoul. “As long as the economy remains sluggish, I think condoms will continue to sell at a steady pace.”
Some newlyweds are having to choose between a honeymoon abroad or at a domestic destination, after the won’s slide raised the cost of going abroad.
Travel Agency “Tour Baksa” started offering this month 1 million won ($735) honeymoon packages to cities such as Kyushu, Tokyo, or Osaka in Japan and Hong Kong, Beijing and Shanghai in China. The per-person fee includes an air ticket, one night at a budget hotel and a tour guide for 10 or more couples.
“I can’t believe I’m looking at this as the possible solution to my honeymoon -- it’s so depressing,” said Shin Eun Joo, 29, a cosmetics shop assistant in Seoul who plans to marry in February. “But unless by some miracle the won recovers, there is no way we will be able to afford an overseas honeymoon. We’d have to begin our marriage over our heads in debt.”

CD금리 0.69%p 급락…10년 만에 최대폭
2008년 12월 11일 16:48

한국은행의 파격적인 기준금리 인하로 시중금리인 양도성 예금증서 금리가 10년 만에 최대폭으로 하락했습니다.91일 물 CD 금리는 외환위기 이후 최대폭인 0.69%포인트 하락한 연 4.7%를 기록하며, 2006년 12월 이후 최저치로 마감했습니다.시장 관계자들은 CD 금리가 당분간 하향 안정세를 보이면서 CD 금리에 연동하는 주택담보대출 금리도 떨어질 것으로 전망했습니다.

Extra budget bill bogged down in Assembly
기사입력 2008-09-13 13:01

The National Assembly yesterday failed to pass the government`s extra budget package at its plenary session. The main opposition Democratic Party called the bill from the special budget committee invalid because the vote failed to meet quorum.Hong Joon-pyo, floor leader of the ruling Grand National Party, immediately expressed his intention to step down, taking responsibility for the failure to pass the contentious bill.Some GNP members have questioned Hong`s leadership, denouncing him for having conceded too much to its rival party despite its overwhelming plurality with 172 seats at the 299-member parliament. Senior party officials, however, opposed his resignation, attributing the failure to the DP`s boycott of the bill."The refusal by the DP to pass the bill is tantamount to a declaration of war to devastate people`s livelihoods," said Kim Jeong-kweon, a floor GNP spokesman, in a statement.The GNP has claimed that the bill aims to aid economically underprivileged citizens faltering under the weight of hefty commodity prices.Lashing out at the ruling party`s attempt to pass the bill in the Assembly, the DP indicated that it would not cooperate with the GNP, presaging a tough road ahead for the Assembly. The parliament had been bogged down for more than 80 days due to partisan wrangling before its regular session began last week.The DP demanded that the parties go back to the drawing board with the bill, and that the GNP make an official apology for seeking to pass the bill without compromise.On Thursday night, 11th-hour efforts by lawmakers of rival parties to reconcile differences failed over whether the package should include subsidies to state-run electricity and gas corporations.The governing party has asserted that the package is necessary to prevent the firms - the Korea Electric Power Corporation and the Korea Gas Corporation - from jacking up utility prices in the face of skyrocketing fuel costs.However, the DP has maintained that "improper" direct subsidies to the firms could set a bad precedent, demanding a substantial cut in the proposed extra budget.Early yesterday morning, lawmakers of the ruling party and the minor Liberty Forward Party passed the bill at the Special Committee on Budget and Accounts, with the DP boycotting the vote.The DP immediately dismissed the decision as flawed, arguing that one of the committee members was not officially approved, and that the committee failed to meet the quorum needed to pass the bill.Among the 50 lawmakers comprising the committee, a minimum of 26 members must approve the bill to refer it to the Assembly`s plenary session. One of the GNP members who joined the voting was yet to be officially approved as a committee member.The GNP requested that National Assembly Speaker Kim Hyung-o exercise his right to directly refer the bill to the plenary session. Kim refused, citing "procedural flaws" in passing the bill at the committee.The GNP and the government have pressed for the approval of the bill, which they call a "gift for ordinary citizens" ahead of Chuseok, in an apparent attempt to bolster flagging public support.At the committee yesterday, the GNP and the LFP passed a supplementary budget of about 4.267 trillion won ($3.9 billion). The two parties agreed to offer subsidies worth 1 trillion won to energy firms in the red.The government initially proposed an extra budget of 4.9 trillion won, primarily to offset losses incurred by the two energy firms. It sought to offer 1.25 trillion won to the companies to compensate for losses arising from the freezing of electricity and gas fees.By Song Sang-ho

“3월 위기설 근거없다..일본계 자금 영향 제한적”
강만수 장관 “내년 1월1일부터 즉시 예산집행 가능토록 해달라”

강만수 기획재정부 장관은 5일 최근 일고 있는 3월 위기설에 대해 근거없다고 밝혔다.

강만수 장관은 이날 오전 정부과천청사에서 관계장관들과 ‘제15차 위기관리대책회의’를 주재한 자리서 “경제가 어려워지자 지난 9월 위기설에 이어 최근 내년 3월 위기설이 제기되고 있으나 숫자상으로 봤을 때 전혀 근거가 없다”고 말했다.

강만수 기획재정부 장관이 5일 정부과천청사에서 '제15차 위기관리대책회의'를 주재하고 있다.

그는 “일본계 은행으로부터의 차입, 일본계 채권투자자금, 일본계 주식투자자금 등의 규모는 미미한 수준으로 국내 금융시장에 미치는 영향은 매우 제한적일 것으로 예상된다”고 설명했다.

10월말 현재 국내은행이 일본계 은행으로부터 차입한 금액은 106억 6천만달러로 전체 은행외채의 9% 수준이며, 내년 1분기 만기도래 규모는 11억 1천억달러로 집계됐다.

국내에 들어온 일본계 채권투자자금은 11월말 기준으로 7조 7천억원으로 전체 외국인 채권투자의 8.5% 수준이며, 내년 1분기 전체 외국인 채권 만기도래 규모는 5조 3천억원이다.

또 일본계 주식투자자금은 11월말 현재 3조 4247억원으로 전체 시가총액의 0.6% 수준에 불과하다.

김동수 기획재정부 제1차관도 이날 한 라디오 방송에 출연해 “일본계 자금이 빠져나가더라도 국내 경제에 위협이 될 수 없다”며 “3월 위기설은 9월 위기설의 아류로 근거도 극히 미약하며 실체도 없다”고 강조했다.

김 차관은 또 “내년 3월에 만기 도래할 일본계 채권금액은 16억달러로 우리 은행권 하루 평균 차입금액(25억달러)과 비교할 때 크지 않은 수준”이라고 설명했다.

그러나 그는 “일본계 자금에 대한 모니터링을 강화하고 중소기업에 대한 자금지원도 강화하겠다”고 밝혔다.

“예산집행을 얼마나 조기에 계획대로 집행하느냐에 따라 내년 경기가 크게 좌우”

한편 강만수 장관은 이날 위기관리대책회의 자리서 “각 부처는 내년 1월 1일부터 즉시 예산집행이 가능하도록 해달라”고 말했다.

그는 “내년도 예산집행을 얼마나 조기에 계획대로 집행하느냐에 따라 내년 경기가 크게 좌우될 수 있는 만큼 예산집행에 만전을 기할 것”을 당부했다.

국회에서 예산안이 법적 처리시한(2일)을 넘겨 아직도 통과되지 않았지만 할 수 있는 한 사전 준비작업에 힘을 써 달라는 부탁이다.

강 장관은 아울러 “최근 해외시장 위축으로 생산ㆍ내수ㆍ수출 등 실물지표가 감소로 전환되는 등 경기침체의 폭과 기간이 확대될 위험이 있다”며 “자동차ㆍ반도체 등을 비롯한 우리 주력산업의 어려움이 가중되고 있고, 특히 부품ㆍ기자재 업체 등 중소기업의 어려움이 클 것으로 생각된다”고 언급했다.

그는 이어 “정부는 금융ㆍ재정 등 거시적 대응책 이외에도 산업별 미시적 애로요인에 대한 파악에 들어갔으며 오늘 회의에서도 이런 상황을 점검할 것”이라며 “제기된 문제점 등에 대한 대응방안을 신속히 논의해 향후 위기관리대책회의에 상정ㆍ추진해 나가겠다”고 밝혔다.

작성. 미디어기획팀 임현수(limhyeonsu@mosf.go.kr)

As of the end of September 2008, total financial assets outstanding on the flow of funds table stood at 8,713.1 trillion won, an increase of 2.1% from the preceding quarter-end.- During the third quarter of 2008, funds supplied to the non-financial sectors by the financial sector stood at 52.0 trillion won, which decreased compared to the preceding quarter's 75.9 trillion won.
- During the third quarter of 2008, the volume of financial transactions (volume of financial assets utilized) exhibited an increase of 54.0 trillion won, down from the preceding quarter's increase of 186.1 trillion won.
A rumor of the "Impending Financial Crisis in March 2009" is groundless

Recently, a rumor of "March Crisis" was triggered by fear that Japanese investors might withdraw their capital from the Korean financial market as Japanese banks close their books on March 31, the end of fiscal year. However, as the volume of capital that might be withdrawn by Japanese investors would be minimal, the capital flight, even if it occurs against all the odds, is not expected to cause any significant impact on the Korean financial market.

1. Korean domestic banks' borrowings from Japanese counterparts
As of the end of October 2008, the outstanding amount of borrowings from Japanese banks stood at USD10.66 billion, accounting for a mere 9 percent of domestic banks' external debts (totaling USD116.6 billion). The repayment of USD6.71 billion, 63 percent of the total borrowings from Japanese banks, will be made from January 1st, 2010. And the repayment of USD1.64 billion will become due sometime between December 1st 2008 and the end of March 2009.

(USD billion)
Outstanding amount as of end-Oct 2008

Nov 2008~Dec 2008

2009
From 2010

Nov
Dec

1Q
2Q
10.66
0.98
0.45
0.53
2.97
1.11
1.23
6.71

2. Japanese bond investments in Korea
As of the end of November 2008, the Japanese bond investments into Korea totaled KRW7.7 trillion which comprised of KRW7.5 trillion by Korean branches of Japanese banks and KRW200 billion by Japanese investors. However, the bonds held by the Japanese accounted for a mere 8.5 percent of the total KRW90.7 trillion of foreigners¡¯ bond investments including those held by foreign bank branches and individual investors. They only represented 0.9 percent of the total value of listed bonds worth KRW853 trillion.

* Please note that Korean branches of Japanese banks hold roughly 15% of the total value of bonds held by foreign bank branches (KRW49.5 trillion) and Japanese investors hold 0.4% of the total foreign investors¡¯ bonds worth KRW41.2 trillion.

3. Japanese stock investments in Korea

As of the end of November 2008, the Japanese stock investments into Korea amounted to approximately KRW3.4 trillion, representing a mere 0.6 percent of the total market capitalization in Korea worth KRW596 trillion.
South Korea Lawmakers Approve 217.5 Trillion Won 2009 Budget
©2008 Bloomberg News
By Saeromi Shin
Dec. 13 (Bloomberg) -- South Korea's national assembly approved a 2009 budget of 217.5 trillion won ($158 billion) aimed at boosting spending on infrastructure and create jobs amid a global economic recession.
Lawmakers today approved the budget, about 100 billion won less than a November proposal by the government, the Ministry of Strategy and Finance said in an e-mailed statement. The 2009 budget marks a 12 percent increase from a year earlier.
South Korea will increase spending on roads, bridges and other infrastructure projects by 26 percent and on job creation and training by 41 percent. The government will execute 60 percent of the budget in the first six months, the ministry said.
South Korea's government will make ``all-out'' efforts with the approved budget to overcome the ``unprecedented'' economic crisis, presidential spokesman Lee Dong Kwan said in a written statement made after the passage.
South Korea's economy will expand 2 percent next year, the slowest pace in 11 years, as the deepening global recession cools demand at home and abroad, the central bank said yesterday.
--Editor: Anand Krishnamoorthy.
Push for Bigger Government Investments at State-Run Financial Firms
[매일경제] 2008년 12월 02일(화) 오후 07:21 가 가 이메일 프린트
A plan is being pursued to expand government investments at state-run financial institutions that play a stabilizing role in the financial market.The National Assembly’s committee on political affairs financed 1.5 trillion won in government investments to the Industrial Bank of Korea, which was 500 billion won more than the initial government budget, while investment to Korea Housing Finance Corporation was also expanded from 200 billion won to 500 billion won, according to the Ministry of Strategy and Finance and the Financial Services Commission (FSC) on Tuesday.The political affairs committee presented such plans to add investments for state-policy financial institutions to the special committee on budget and accounts.“Government investments need to be increased to stretch the functions of state-run financial institutions for countering the financial crisis,” said a FSC official. “However, it is yet uncertain whether it will be passed at the special committee,” the official added.The government will also speed up its move to expand capital at the Export-Import Bank of Korea where the Bank of International Settlements (BIS) capital adequacy ratio sank to reach the 8 percent level as of the end of September. It looks to alter its plan for financing 350 billion won and 300 billion won in 2008 and 2009, respectively, to invest all 650 billion won this year.[Eun-young Sa / JYJ][ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]
[YEAR-END REVIEW(3)]2008: Turbulence rocks finance sector
기사입력 2008-12-12 10:00

Korea`s financial sector is one of the prime victims of this year`s global credit crunch and the consequent downturn of the world economy.The nation`s financial watchdogs and analysts say the current financial turmoil, which was rooted in the U.S. subprime mortgage crisis of early 2007, was caused by external factors and local financial companies` fundamentals are much sounder than they were during the 1997-98 Asian financial crisis.But local banks and brokerages have been struggling since the collapse of Lehman Brothers and AIG, which is now threatening the real economy.A sense of crisis blanketed local banks and other financial institutions when losses stemming from Lehman Brothers-related derivatives investments were revealed after the fourth-largest U.S. investment banking group failed in September.Korean financial companies were found to have invested a total of $1.44 billion in Lehman Brothers-related investment products, according to Financial Supervisory Service data. Local banks, brokerages and insurance companies had invested a total of $720 million in derivatives at Lehman Brothers Holdings Inc. as of September. Investment in equity linked derivatives was estimated at $390 million followed by $290 million invested in securities and $28 million in loans.Investments in Merrill Lynch, which was merged with Bank of America, was also estimated at around $720 million, the FSS data showed.The collapse of Lehman Brothers was a greater shock to Korean financiers since the state-run Korea Development Bank had failed to acquire the troubled investment bank in August, only to see the financial mogul fall to the ground in less than two months. The KDB, in particular, aimed to become what Lehman Brothers had been for many decades - a global investment banking group - in advance of the implementation of the Capital Market Consolidation Act which takes effect in February 2009.Market watchers have pointed out that the traditional model of investment banking sought by many Korean banks should be completely redrawn.Major Korean banks, such as Kookmin, Woori, Shinhan and Hana, in an effort to broaden their financial service portfolios, have transformed themselves into financial holdings firms in recent years. Mergers and acquisitions of financial firms and cross-selling of derivative products, however, are now asking for more solid risk control mechanisms since the Lehman Brothers debacle.Local banks and brokerages saw their profits plummet and capital adequacy levels stumble amid the global financial crisis.Banks` BIS capital adequacy ratios dropped to 10.61 percent on average by the end of September this year, down 0.94 percent from three months earlier, the FSS data showed.Kookmin Bank, the nation`s largest commercial lender, and the Korea Export Import Bank posted BIS ratios of lower than 10 percent during the same period - 9.14 percent and 8.16 percent each. Local banks are advised to maintain their BIS capital adequacy ratios of 10 percent or more by.The FSS in early December asked local banks to raise their Tier 1 capital ratio, banks` core capital to risk-weighted assets, above 9 percent by the end of January 2009, from the current 7-8 percent level. The regulators said this will be able to raise banks` BIS capital adequacy ratios to between 11 and 12 percent from the current 10 percent level.Banks` net profit dropped 36.2 percent to 8.4 trillion won ($6.03 billion) during the first nine months of this year from a year earlier while their default ratios rose 0.09 percent to 0.81 percent during the same period.The nation`s major brokerages also took a hit after the financial turmoil rolled into the local market as their invested assets record losses on the crashing stock market and a drop in brokerage fees.Brokerages` net profit in the first half of the 2008 fiscal year fell 71.07 percent on average. Samsung Securities posted operating losses of 27.3 billion won in October alone. This is the first time the nation`s largest securities house posted an operating loss since the credit card bubble burst in 2003. Daewoo Securities and Woori Investment and Securities also reported operating losses of 38.9 billion won and 22.4 billion won each during the same period.The financial turbulence not only affected local banks and brokerages` performances for this year but the market atmosphere as well. While the local market awaits sales of major financial companies, such as Korea Life Insurance, Kumho Life Insurance and Eugene Asset Management Co., Lone Star Funds hired Credit Suisse Group to find a buyer for the Korea Exchange Bank.Lone Star Funds` three-year battle to sell Korea Exchange Bank finally gained momentum in November when the court ruled that the Dallas-based investment fund did not politically conspire or manipulate to buy the bank below fair market price in 2003. Lone Star Funds had been trying to sell its controlling 51 percent stake in the bank to U.K.-based HSBC for $6.3 billion, only to be hindered by the legal uncertainty.The nation`s major financial holding firms, Kookmin and Hana Financial Groups, had shown interest in buying Korea Exchange Bank before the bankruptcy of Lehman Brothers. The credit market seizure accompanied by a looming recession, however, have put any acquisition efforts on hold for now.Mo Jae-sung, an asset manager at Hanwha investment Trust Management said, "KEB doesn`t seem to be an attractive purchase at the moment, given its deteriorating asset quality and the credit-squeezed market condition. Lone Star may simply have to wait for the right time." By Jeong Hyeon-ji

Challenges Ahead after Drastic Rate Cut
The Bank of Korea (BOK)’s drastic rate cut move should be welcomed. With BOK slashing the base rate by a record low of 1 percentage points from 4 percent to 3 percent, the market which had expected a 0.5 percentage point cut seems to be satisfying with BOK’s such decision. BOK had lowered the base rate 2.25 percentage points over the past two month beginning early October. The base rate has descended to the record low since 1999 when the nation had first carried out an interest-focused monetary policy. BOK’s monetary easing came upon its judgment that it’s no longer impossible to disregard a rapidly chilling real economy amid a credit squeeze in the financial market. However, the real interest is more crucial than the benchmark rate. The nation’s real interest made a precipitous climb despite the declined base rate; corporate bonds are still yielding profitability 4 percentage points higher than that of treasury bonds. Considering market conditions, the real interest is unlikely to make a steep fall. Once countermeasures that can drop the real interest aren’t devised, base rate cut effects are unavoidably to reduce. The interest rate cut can’t be no longer completely relied upon; plans on a direct liquidity injection should be advanced. More proactive capital supply is required as BOK had induced financial institutes to operate funds via reducing repurchase agreement (RP) sales. Counteractions for a smoother capital flow should be also pushed ahead via accelerating the process on an insolvent corporate reorganization and support on bank’s capital expansion. Without implementing a corporate restructuring, a huge amount of liquidity pump will be just a waste of time and energy. Firms hanging on to the last moment in an attempt to avoid a restructuring, and banks avoiding lending due to fears over worsened corporate soundness indicators shouldn’t be neglected, the government should be responsible of eradicating corporate and financial sector insolvency. [Translated by Eun-jung Kim / JYJ] [ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]
Banks Move to Lower Deposit Rates after Drastic Rate Cut
Commercial banks have been thrown into confusion after the Bank of Korea slashed the benchmark rate by 1 percentage point, which was steeper than the market initially forecasted. Banks are busy altering their plans for lowering deposit interest rates as the cut in the key interest rate was bigger than expected. According to the banking circle on Thursday, most commercial banks are reviewing plans to lower deposit rates after the BOK monetary policy committee’s rate cut, but they have not been able to determine the exact amount. Woori Bank, which had promptly disclosed plans to adjust deposit rates after the previous reduction in the key interest rate, is readjusting its rate cut plan after the central bank slashed rates by more than the market estimate. “The rate cut was bigger than expected,” said a Woori Bank official. “Plans were made with rate reductions expected at 0.5 percentage point or 0.75 percentage point but as a 1 percentage point cut was carried out, plans for adjusting interest rates are being made over,” the official added. Shinhan bank, Hana Bank and Industrial Bank of Korea also disclosed that they are reviewing the possibility of lowering deposit rates, taking into account the trends in market interest rates. [Eun-young Sa / JYJ]

Government Seeks to Invest Semi-Public Funds in Banks
The government is reviewing various ways to provide funds that equal the form of public funds to increase capital and lending power at banks. “In order to elevate the Bank for International Settlements (BIS) capital adequacy ratio, we will devise supportive measures on a governmental level to promote self-rescue efforts at banks such as issuing subordinated debt and increasing capital,” said a government official on Thursday. The government is examining the possibility of purchasing subordinated debt at banks through Korea Development Bank (KDB), pension and funds as well as funneling a part of the bond market stabilization fund which is to be established at a scale of 10 trillion won. From among bank bonds that the Bank of Korea (BOK) has recently bought through repurchase agreement (RP) transactions, around 10 percent are subordinated debt, and the central bank plans to expand purchases. Subordinated debt is accepted as supplementary capital and therefore can raise the BIS ratio. Another measure being reviewed is the possibility of including Korea Housing Finance Corporation bonds within those subject for RP transactions with BOK in order to make it easy to finance funds, and with this, purchase mortgage bonds at banks to improve the BIS ratio. In addition, another plan being discussed is for Korea Asset Management Corporation (KAMCO) to increase purchases of insolvent obligations at banks. KAMCO is examining the possibility of expanding its equity capital by issuing bonds worth 400 billion won in December, which would enable it to buy more insolvent bonds at financial firms given an increase in its capital funds. Also the measure of state-run banks such as KDB or pensions and funds purchasing redeemable preferred stock issued by banks is being brought up for discussion. Buying redeemable preferred stock can earn high profits from dividends, but the demerit is that it later places a larger cost burden on banks. “The method that the government is currently reviewing as a short-term measure is not to directly inject public funds, but to provide support in an indirect and roundabout way and match the self-rescue efforts of banks,” said the government official. 　 [Eun-young Sa / JYJ]

http://news.search.naver.com/search.naver?where=news&query=capital+at+the+Export-Import+Bank+of+Korea&sm=top_hty&frm=t3&fbm=0

FSC to Form 10 Trillion Won Fund to Stabilize Bond Market
The government decided to preemptively countermeasure against the persisting financial insecurities via establishing a fund worth 10 trillion won that will stabilize the bond market. In addition, the government and the Bank of Korea (BOK) are to urgently inject $16 billion of capital in the export and import finance of domestic companies beginning November 17. The Financial Services Commission (FSC) Chairman Jeon Kwang-woo disclosed on November 13, “In an attempt to ease up a temporarily distorted market driven by the recent escalated uncertainties in the financial market, the formation of ‘bond market stabilization fund (a temporary name)’ scaled at 10 trillion won will be pursued centered on bond investment institutes such as local banks, insurers, and state pension fund.” Chairman Cheon during a press conference on this day stated, “Taking into account that the fund will be set up by private funds, the investments will be made only in institutions with credit rate of over BBB+,” and added, “Besides bank bonds, the fund will also invest in bonds issued by financial firms, pulling up the overall interests on bond issuance.”
BOK to Supply Up to 5 Trillion Won for Bond Fund

The Bank of Korea announced Monday it will put up to 5 trillion won or 3-point-4 billion US dollars into a proposed 10 trillion won fund to stabilize the local bond market.The central bank will take part in the fund by printing fresh money and buying bonds from companies and commercial banks through repurchase agreements.[Interview : Lee Jooyeol The Bank of Korea] "The 5 trillion won will help the rescue fund, and it shows the central bank's attempt to stabilize the market."The Financial Services Commission announced earlier this month it would create the fund to ease a corporate funding squeeze through purchases of bonds from banks, insurers, brokerages and pension funds.[Interview : Kim Joohyeon Financial Services Commission] "We are aiming to first support those private firms that are suffering from the liquidity shortage."The central bank expects money market rates will decline and its announcement will help to get money flowing through the economy once again.However, there are concerns that this 10 trillion won fund will not be enough to fully stabilize the market and more support will be needed.Kim Nari, Arirang News.NOV 25, 2008

Reporter : narikim@arirang.co.kr
To accomplish such plan, the Korea Development Bank (KDB) is to finance around 2 trillion of industrial financial bonds of which 1 trillion won will be backed by the government -- the fund plans to purchase a wide range of bonds including financial bonds, corporate bonds, and installment bonds. [Eun-jung Kim / JYJ]

채권안정펀드 지원방안 24일 발표
홍준석 기자 jshong@sed.co.kr
한국은행이 채권시장안정펀드 지원방안을 오는 24일 공식 발표한다.이주열 한은 부총재보는 20일 오후 기자간담회에서 “금융위원회가 채안펀드 조성과 관련해 한은의 협조를 구해와 내부적으로 검토 중”이라며 “한은이 어느 정도의 규모를 어떤 방법으로 지원하는 것이 좋은지 24일 금통위 논의를 거쳐 정부에 통지할 계획”이라고 말했다.이에 따라 한은은 은행이 보유한 은행채ㆍ국공채 등을 환매조건부(RP) 거래 방식으로 사들이고 은행권이 펀드에 출연하는 방식으로 간접 지원하는 방안이 유력한 것으로 보인다.
이 부총재보는 “한은이 직접 펀드에 참여하는 것이 아닌 만큼 (신용등급이 낮은 펀드를 매입하는 데 따른) 리스크에는 노출되지 않는다”고 설명했다.한편 그는 양도성예금증서(CD)나 기업어음(CP)을 한은이 매입하는 방안은 전혀 고려하지 않고 있다고 밝혔다. 이 부총재보는 “정부로부터 CD나 CP 매입을 요청 받은 바가 없다”면서 “특히 CD의 경우 유가증권으로 보지 않는다는 것이 대체적인 유권해석인 만큼 현재로서는 한은이 매입할 수 없다”고 말했다.

정부가 10조원 규모의 채권시장안정펀드를 조성해 회사채와 금융채 등을 인수, 기업과 금융권의 자금난을 덜어주기로 했다. 전광우 금융위원장은 13일 기자 간담회를 갖고 "기관투자가들이 최근 채권 투자를 기피하는 경향이 있어 은행과 보험사, 증권사, 연기금 등을 중심으로 채권시장안정펀드의 조성을 추진하겠다"고 밝혔다. 산업은행은 산업금융채권을 발행해 이 펀드에 2조원을 출자하며 펀드는 신용등급 BBB＋ 이상의 금융채와 회사채, 여전·할부채 등을 인수한다. 정부는 일시적 자금난을 겪는 여신전문회사 가운데 대주주의 지원을 받기 힘든 회사를 우선 지원하기로 했다. 이 펀드는 우량 수출기업 등이 발행한회사채를 묶은 프라이머리 채권담보부증권(CBO)도 인수한다. 전 위원장은 "연기금 등 민간 투자자가 채권시장안정펀드에 출자하도록 유도하기 위해 투자 손실을 최소화하는 방안을 검토하고 있다"며 "신용보증기금과 기술보증기금의 신용보강을 통해 펀드가 매입하는 채권의 위험도를 줄이겠다"고 말했다. 금융위는 이달 안에 구체적인 펀드 조성방식과 운용방향을 발표할 예정이며, 다음 달부터는 회사채 매입이 이루어지도록 할 방침이다. 그는 "기존 채권에 투자했던 기관들이 최근 투자를 기피하는 경향이 있다"며 "재정자금이나 연기금들이 회사채 투자물량을 급격히 회수하는 일이 없도록 관계부처와 협조하겠다"고 말했다. 연합뉴스
Bond Fund

A fund invested primarily in bonds and other debt instruments. The exact type of debt the fund invests in will depend on its focus, but investments may include government, corporate, municipal and convertible bonds, along with other debt securities like mortgage-backed securities.
For investors interested in bonds, a Morningstar bond style box can be used to sort out the investing options available for bond funds. Investors should note that U.S. government bonds are considered to be of the highest credit quality and are not subject to ratings.
Bond fund plan raises brokerages
December 04, 2008
Shares in many local brokerages rose yesterday on expectations that an up to 10 trillion won ($6.81 billion) government bond boosting scheme will stabilize the ailing bond market. Bonds account for a major portion of brokerages’ asset portfolios. Woori Investment and Securities rose 650 won, or 5.8 percent, to 11,850 won. Daewoo Securities advanced 4.7 percent, while KTB Investment and Securities and Hyundai Securities climbed 6.7 percent and 2.8 percent, respectively. SK Securities and Yuhwa Securities headed north by 7.6 percent and 4.5 percent, respectively. The government said yesterday it plans to create a bond market stabilization fund worth 3 trillion won to 5 trillion won level by mid-month with the size to gradually increase to 10 trillion won. Recently, yields on corporate bonds have risen sharply due to a shortage of demand. Yields move inversely to prices. According to Korea Securities Dealers Association data released yesterday, bond trading volume fell on-year by 16.3 percent last month. “Share prices of brokerages have fallen significantly recently as investors look at the worst possible scenarios regarding the bond market,” said Chung Bo-seung, an analyst at Hanwha Securities. “With its plan to create the bond market stabilization fund, the government is assuring investors that uncertainty in the bond market will be eased.” Most bond investors including brokerages sell bonds before they reach maturity, so price means more to them than yields in terms of investment.By Moon Gwang-lip Staff Reporter [joe@joongang.co.kr]

10-Trillion-Won Bond Fund to Launch Mid-December
Tuesday, December 9, 2008 14:43:13
A ten-trillion-won bond market fund will launch in mid-December in an effort to provide liquidity to the domestic bond market, Banks, insurers and brokerage associations have decided to operate the bond fund as an “umbrella fund,” which acts as a single entity but is composed of individual investment funds that can be traded separately. The new fund will be used to purchase debts from banks and non-financial companies.The state-run Korea Development Bank will choose an integrated fund manager and eight subordinate managers.
Reported by KBS WORLD Radio , KBS-->Contact the KBS News: englishweb@kbs.co.kr

http://news.google.co.kr/news?q=bond+fund+korea&complete=1&hl=ko&newwindow=1&um=1&tab=wn&nolr=1

Bond market fund to set sail in mid-Dec.
December 9, 2008 11:44 am by pna
SEOUL, Dec. 9 — Banks, insurers and brokerage houses are poised to launch a 10-trillion-won (US$ 6.9 billion) bond fund in mid-December in an effort to stabilize the local debt market, a trade association said Tuesday.
The bond fund will be in place for three years and used to purchase debts from banks and non-financial companies, the Korea Federation of Banks said in a statement.
Local commercial banks will contribute 6 trillion won into the fund with state-run Korea Development Bank putting 2 trillion won into it. Insurance companies are expected to chip in 1.5 trillion won with securities firms injecting the remainder, it added.
On Nov. 24, the Bank of Korea, the country's central bank, said it will provide up to 5 trillion won to the fund or match up to 50 percent of contributions by financial firms in a bid to help thaw the frozen debt market. (PNA/Yonhap)

BOK to inject up to 5 trillion won into bond fund
November 24, 2008 1:44 pm by pna
SEOUL, Nov. 24 — South Korea's central bank said Monday it will inject up to 5 trillion won (US$ 3.33 billion) into an envisioned bond fund aimed at stabilizing the local debt market which is reeling from a credit squeeze.
The Financial Services Commission (FSC), the country's financial watchdog, plans to create a 10-trillion-won fund into which banks, the state pension fund and other institutional investors would pool money to buy financial and corporate debts. The state-run Korea Development Bank plans to invest 2 trillion won in the fund.
There have been concerns that cash-squeezed local banks may be lukewarm towards the fund and unload their government bond holdings to secure much-needed cash, rattling the debt market in the past few weeks.
Last week, Lee Ju-yeol, a deputy governor at the Bank of Korea (BOK), said the BOK is not considering buying commercial papers held by companies or certificates of deposit as a way to provide liquidity to the fund, adding that the government has not asked the central bank to do so. (PNA/Yonhap)
S.Korean household becomes more indebted to non-banking firms
September 25, 2008 10:46 pm by pna
SEOUL, Sept. 25 — South Korean low-income households with poor credit ratings are increasing their lending from the non- banking sector such as credit card, leasing companies and savings banks, the Korea Times reported Thursday.
As of the end of June, households' total debt owed to the non- banking firms gained 15 percent from a year earlier to 238.3 trillion won (248.9 billion U.S. dollars) according to the Bank of Korea (BOK).
The debt growth rate is the highest since 2002 when it increased by 20 percent, the BOK said.
The central bank estimates a 17 million won (14,912 U.S. dollars) debt per household.
Korea times attributed the growing debt burden to the increase of low-income earners who find difficulty in borrowing from commercial banks and thus have no choice but to use debt from secondary financial firms.
Korea Institute of Finance said since non-banks generally apply higher interest rates to loans with more stringent repayment provision, it expects the financial burden of low income households to increase.
The regulator added that it will continue to relax rules governing savings banks so that they can offer better business to low-income households. (PNA/Xinhua)

FSC to Form 10 Trillion Won Fund to Stabilize Bond Market
The government decided to preemptively countermeasure against the persisting financial insecurities via establishing a fund worth 10 trillion won that will stabilize the bond market. In addition, the government and the Bank of Korea (BOK) are to urgently inject $16 billion of capital in the export and import finance of domestic companies beginning November 17. The Financial Services Commission (FSC) Chairman Jeon Kwang-woo disclosed on November 13, “In an attempt to ease up a temporarily distorted market driven by the recent escalated uncertainties in the financial market, the formation of ‘bond market stabilization fund (a temporary name)’ scaled at 10 trillion won will be pursued centered on bond investment institutes such as local banks, insurers, and state pension fund.” Chairman Cheon during a press conference on this day stated, “Taking into account that the fund will be set up by private funds, the investments will be made only in institutions with credit rate of over BBB+,” and added, “Besides bank bonds, the fund will also invest in bonds issued by financial firms, pulling up the overall interests on bond issuance.” To accomplish such plan, the Korea Development Bank (KDB) is to finance around 2 trillion of industrial financial bonds of which 1 trillion won will be backed by the government -- the fund plans to purchase a wide range of bonds including financial bonds, corporate bonds, and installment bonds. [Eun-jung Kim / JYJ]

LG Electronics is grabbing the attention of industry watchers with the latest development of next generation technology.The buzz is about a small chip which experts say is the first of its kind in the world.The chip is expected to make wireless communication even more convenient than it is all thanks to technology dubbed the Long Term Evolution or LTE.[Interview : Paik Woohyun, President LG Electronics] "The next generation chip that LG Electronics has made can transmit data at a speed almost identical to high speed Internet."One could say the advantage of LTE chips is in the speed. The download time of one movie on a cell phone that has this chip is only about a minute. That's five times faster than the wireless techonology out on the market right now. The early development of LTE chips was led by European telecommunication giants like Nokia and Ericsson.The latest achievement by LG Electronics has brought the commercialization of the technology that much closer. Company officials hope to come out with LTE computers and cell phones by 2011. This certainly puts rival Samsung Electronics on edge as it leads the domestic market in wireless broadband technology and is in the process of commercializing a product similar to what LG has developed. The race is on between the two electronics companies and only time will tell which technology will lead the future telecommunications market.As for consumers they can expect better times ahead with mobile phones that have better functions.Shin Haejoo Arirang News.DEC 10, 2008

Reporter : hshin@arirang.co.kr

White House throws lifeline to US carmakers

Tim Reid: the politics of the U-turn Bush throws eleventh-hour lifeline Long road to recovery Tom Baldwin: wrong type of car
President Bush yesterday effectively opened the floodgates to Washington's $700 billion (£468.9 billion) rescue scheme after the White House said it was considering allowing the near-bust American car industry to access the federal fund.
In an astonishing U-turn, the White House said it may permit General Motors and Chrysler to use the Troubled Asset Relief Programme (Tarp), which was set up in October to bail out Wall Street.
Under the terms of the Tarp, Washington uses taxpayer money to take a stake in a troubled company, providing the firm with an immediate capital injection in return for very onerous conditions to the way it runs its business.
The move by the White House, which has long opposed allowing non-financial firms to access the $700 billion bail-out fund, is expected to trigger a rush of other distressed industries who also believe that they deserve state aid.
Insurers and car leasing companies have already begged for access to the fund.
The shift came just hours after Republicans in the Senate blocked a bill that would have thrown a $14 billion lifeline to America's fragile car manufacturing industry.
Both General Motors and Chrysler have said that without an immediate cash loan, they may run out of money by the end of the year and be forced to apply for Chapter 11 bankruptcy protection.
It is widely believed that once the car groups enter Chapter 11 they will collapse because customers would be reluctant to buy a new car from a company that may not survive long enough to meet its obligations on warranties and servicing.
The move represents an embarrassing blow to Henry Paulson, the US Treasury Secretary, who devised the bail-out, after he has been publicly adamant that only financial firms should be allowed to tap the fund and that Congress should devise its own loan for the carmakers.
On Thursday night, Republicans blocked the passage of a finance bill to lend $14 billion worth of taxpayer money to the car industry because they insist that federal funds should not be used to prop up failing businesses.
However, Democrats, led by Barack Obama, the US President-elect, are anxious to prevent the collapse of the car industry because it provides around three million jobs across the country. Unemployment is already rising fast with 6.7 per cent of the American workforce out of a job.
A spokeman for the White House said yesterday: "A precipitous collapse of this industry would have a severe impact on our economy, and it would be irresponsible to further weaken and destabilize our economy at this time."
The prospect of an alternative rescue plan for America's carmakers cushioned a potentially disasterous opening to yesterday's trading on Wall Street.
While the Dow Jones industrial average lost 131.18 points to 8, 433.91, the decline was far from the steep fall that had been expected in reaction to the US Senate's rejection of the $14 billion bailout.
In London, the FTSE 100 index reversed slightly from earlier losses of nearly 180 points, to fall by 126.6 points to 4,262.09 by yesterday afternoon. In Germany, stocks continued to fall on the country's DAX index which declined 113.98 points, dragged lower by local carmakers, BMW, Daimler and Porsche.
While in France, the CAC 40 index fell lost 108.25 points to 3,197.88.
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