South Korea Orders 5 Weak Banks Closed

The South Korean government ordered the closure of five insolvent banks as part of its effort to restore foreign investor confidence in the nation’s beleaguered economy. The action was in keeping with Seoul’s promise to restructure its inefficient financial sector in exchange for a $58-billion bailout by the International Monetary Fund. The banks were identified as Kyungki, Chung Chong, Daedong, Donghwa and Dongnam. Officials said five bigger commercial banks will take over the five insolvent banks. Local media reported that the government has promised to write off much of the failed banks’ debts.