Korea's top central banker is taking a cautious stance,... as discussions on financing the government's corporate restructuring drive gains momentum.
One of the options discussed is for the central bank to inject money to state run banks that will be saddled with debt.
But the governor says loans may be better than capital injections in order to mimimize the losses.
Kim Min-ji has the latest.
The Bank of Korea Governor says... there should be an acceptable basis for the central bank to use its authority to print more money.
Speaking to reporters in Frankfurt on the sidelines of the 19th ASEAN+3 Finance Ministers and Central Bank Governors Meeting.... Governor Lee Ju-yeol said the basic principal is to keep the central bank's monetary loss to a minimum in the government's corporate restructuring drive.
His remarks come as there have been growing calls for the central bank to support state banks which will be debt-ridden by providing funds for the country's ailing shipping and shipbuilding companies.
The governor also expressed skepticism about the central bank giving cash directly to the state banks to expand their capital base,... saying the BOK cannot use its authority to print money without collateral.
The top central banker instead said that loans are a better option than injecting money in order to minimize losses.
He referred to a fund used back in 2009 -- whereby the central bank extend loans to commercial banks in exchange for bonds as collateral -- and those banks use the money to facilitate funds to institutions with low capital adequacy ratio.
On Wednesday,... a special task force of government and BOK officials agreed to consider all available means to expand the capital base of state banks,... during their first meeting to discuss financing the government's corporate restructuring plan.
Lee said that the central bank will not hesitate if there's a role to be taken,... and added that the BOK will also take measures to stabilize of the local financ
One of the options discussed is for the central bank to inject money to state run banks that will be saddled with debt.
But the governor says loans may be better than capital injections in order to mimimize the losses.
Kim Min-ji has the latest.
The Bank of Korea Governor says... there should be an acceptable basis for the central bank to use its authority to print more money.
Speaking to reporters in Frankfurt on the sidelines of the 19th ASEAN+3 Finance Ministers and Central Bank Governors Meeting.... Governor Lee Ju-yeol said the basic principal is to keep the central bank's monetary loss to a minimum in the government's corporate restructuring drive.
His remarks come as there have been growing calls for the central bank to support state banks which will be debt-ridden by providing funds for the country's ailing shipping and shipbuilding companies.
The governor also expressed skepticism about the central bank giving cash directly to the state banks to expand their capital base,... saying the BOK cannot use its authority to print money without collateral.
The top central banker instead said that loans are a better option than injecting money in order to minimize losses.
He referred to a fund used back in 2009 -- whereby the central bank extend loans to commercial banks in exchange for bonds as collateral -- and those banks use the money to facilitate funds to institutions with low capital adequacy ratio.
On Wednesday,... a special task force of government and BOK officials agreed to consider all available means to expand the capital base of state banks,... during their first meeting to discuss financing the government's corporate restructuring plan.
Lee said that the central bank will not hesitate if there's a role to be taken,... and added that the BOK will also take measures to stabilize of the local financ
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