• 08 / 06 / 2009
  • FSC Vice Chairman Rhee - Interview with Reuters

  • FSC Vice Chairman Chang-Yong Rhee has met with Reuters on June 18, 2009 during the World Economic Forum in Seoul to talk about the current state of Korea's economy.

    S.Korea Financial Services Commission Vice-Chairman Changyong Rhee

    2009.08.06 REUTERS News

    Deborah Kan: Hello. I am Deborah Kan at the World Economic Forum in Seoul.
    The impact of the financial crisis on South Korea has been severe, but the economy is showing signs of rebounding. But the vice chairman of the Financial Services Commissions says South Korea must remain cautious.

    Rhee Chang-yong: Ití»s very hard to actually predict but we have recently see lots of good signs that our economy is moving fast the bottom of the business cycle. But what we are worrying about is whether this tendency will continue. I believe if there is no another round of the Global financial turmoil, I think Korea, Korean economy will move on the right track, recovery track, even though the recovery speed may not as fast as we desire.

    Deborah Kan: So what signs of recovery are you actually seeing here?

    Rhee Chang-yong: business sentiment is now 4 or 5 months consecutively shows signs of the recovery. Also, you know, the price of the assets, some assts, stopped declining. But on the other hand, the employment and also Ah,, employment is one of the area that it hasní»t showed the beginning of improvement. Thatí»s what we are worrying about it.

    Deborah Kan: Obviously South Korean economy has the huge troubles which are strong point of the economy. But at time like this, are their worries and are their thinks that you can do to make sure that the troubles remain strong?

    Rhee Chang-yong: At this moment, I was, in general, I was able to not have any problem. So for the company, for the Chae-bols which actually did lots of aggressive M&As. they may have a difficulty because they had a leverage M&A. They have a difficulty in paying back their loans. So that may cause suspicious con of the banking sectors again. In order to get rid of those possibilities, what we are asking for the bank, to the bank, is to check their liquidity positions and persuade them to sell some of the M&A companies for their own benefit as well as the benefit of the, you know, bank soundness.

    Deborah Kan: Do you have concerns that there are too many smaller banks here and do you expect further consolidation?

    Rhee Chang-yong: I think ití»s not a good time to talk about the government-led M&As or the consolidation. And now we are focusing more on what kind of the capital adequacies and bank financial soundness we applied to each bank. If they need to consolidate, you know, themselves. We are not, we are actually helping them, but I think this is not a good time to reshape all the industries, you know, by government. This is a time for a fight for the outside, you know, hardship first.

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