• Is the Korean government going ahead with the plan to privatize Korea Development Bank? If so, will there be government guarantee of payment of KDB's new external debt?

  • As planned, the Korean government is going to pursue privatization of Korea Development Bank (KDB) in consideration of the need to secure policy credibility and to meet the new demand for the investment bank function after the global financial crisis. However, the government will follow a flexible schedule to fully account for circumstantial changes, such as deterioration of sell-off condition triggered by the unstable global financial market. According to the Korea Development Bank Act Revision Bill submitted by the government, the government will guarantee payment of previously issued bonds at the time of the initial sell-off of the stake in the KDB holding company. And the government can provide guarantee on bonds to be newly issued by the KDB between the initial stake sell-off and the government stake sell-off.

    These measures have been devised through the IMF technical assistance program and the IMF has made positive assessment of them during the working-level consultation (Dec. 8~17, 2008)

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