The government has decided today to ask the Post Office to pay insurance premiums to the Korea Deposit Insurance Corp. (KDIC), to help finance the repayment of public funds poured into ailing financial institutions in the wake of the Asian financial crisis in late 1997.
In a draft plan on the repayment of the public funds, the Ministry of Finance and Economy said the Post Office should share the burden for public fund repayments. The government will also use surplus budget finances to repay the public funds.
It will replace 13 trillion won (US$10.1 billion) worth of bonds, issued by the KDIC and the Korea Asset Management Corp. (KAMCO), with state bonds by the end of the year.
An additional 23 trillion won worth of KDIC and KAMCO bonds will be replaced by state bonds by 2006.
The balance in KDIC and KAMCO bonds will remain at 97 trillion won as of the end of the year.
The government kept the original plan to use the state budget to repay 49 trillion won in public funds, and allow financial institutions to take the remaining 20 trillion won from the total of 69 trillion won in possible losses from the injection of about 156 trillion won in public funds.
The government will soon establish a state-run fund specializing in the recollection and repayment of the public funds.