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The government wants to inject public funds into banks to secure their capital and spur them to give more loans to customers, especially small and medium-sized firms. The plan comes after previous efforts to persuade banks to help SMEs with cash flow problems floundered on tight demands by international agencies.
A Cheong Wa Dae official on Wednesday said the government ˇ°is trying through the Bank of Korea to help solve some of the problems that the banks are currently faced with, such as maintaining an appropriate BIS capital adequacy ratio, by the end of the year.ˇ± He said a basket of measures will make it easier for banks to give out loans. ˇ°If the BIS capital adequacy ratio goes up and the limit on the total amount of loans a bank can provide is thus loosened, banks will be able to provide more loans without having to worry about fees and other issues.ˇ±
The BIS capital adequacy ratio is an index of how healthy a bank is by looking at the proportion of risky assets and its capital.
(englishnews@chosun.com )
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