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Korea's recapitalization fund worth US$ 9.5 bil. kicks off to facilitate restructuring

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11조 규모 국책은행 자본확충펀드 출범••• 한은 승인 A bank recapitalization fund worth 9-and-a-half billion U.S. dollars has been set into motion. The money will help finance the government-led restructuring drive in the troubled shipping and shipbuilding industries. Hwang Ji-hye explains how the fund will be utilized. The Bank of Korea's monetary policy board approved a 10 trillion won loan on Friday... to help expand the capital base of state-run banks Korea Development Bank and Korea Exim Bank... which face high debt exposure to foundering local shipbuilders. Concerns had soared about the financial stability of these banks as the government-led restructuring in the shipping and shipbuilding industries gained momentum... leading to the decision to create a recapitalization fund early last month. The BOK's loan approval marks the launch of it. On top of the 8-point-7 billion dollars provided by the central bank,... around 800-million worth of loans will be extended by the Korea Asset Management Corporation--a state-backed entity that helps manage distressed assets. Combined, this sets aside 9-and-a-half billion dollars to assist state banks. The loans will be dispersed through the Industrial Bank of Korea,... which will use the capital to buy CoCo bonds issued by the state banks. CoCo bonds, or contingent convertibles, are widely considered the riskiest debt issued by banks that are automatically converted to equity under set conditions. The funds will be provided upon the request of the two banks throughout the end of next year,... but the BOK added,... there is the possibility of extended assistance. Hwang Ji-hye, Arirang News. Visit ‘Arirang News’ Official Pages Facebook(NEWS): http://www.facebook.com/newsarirang Homepage: http://www.arirang.com Facebook: http://www.facebook.com/arirangtv Twitter: http://twitter.com/arirangworld Instagram: http://instagram.com/arirangworld