Banks Put Bailout Cash Straight Back into BOK Korean Banks Recovering Pre-Crisis Financial Soundness Experts Predict Tense Christmas for the Economy Top Firms' Cash Assets, Short-Term Debt Soar Gov't in Fresh Bid to Make Banks Lend More Moody's Mulls Downgrading 10 Korean Banks Gov't Gets Tough on Banks W20 Trillion Promised to Bolster Banks Developed Status 'Could Hurt Korean Bourse'

The central bank will take part in the fund by printing fresh money and buying bonds from companies and commercial banks through repurchase agreements. Lee Ju-yeol, a BOK official, said, "The W5 trillion 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. 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 W10 trillion fund will not be enough to fully stabilize the market.

Arirang News