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The National Assembly on Thursday passed a bailout plan for banks which will see the government guarantee foreign currency debts. Among 238 lawmakers who voted, 218 were in favor of the plan. Ten voted against it and another 10 abstained from voting.
Under the plan, the government will offer a US$100-billion payment guarantee to 18 local banks over the next three years covering debts newly incurred or maturing by the end of June next year.
With a view to minimizing the financial burden on the public, however, the lawmakers put several conditions on the bailout scheme to compel banks to make efforts on their part.
The government should rationalize salaries and stock option benefits for bank executives and ensure sufficient dividends for shareholders. In addition, the government, if necessary, will offer variable limits and rates of guarantee to each bank, depending on banksĄ¯ self-sufficiency efforts, which could include selling their overseas assets. And if the government covers a bankĄ¯s debt, it will acquire the right to indemnity.
(englishnews@chosun.com )
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