FSC Press Release July 29, 1998
Distribution of Bank Rehabilitation Plan Template
- On July 28th the Financial Supervisory Commission (FSC) distributed a template for implementation of rehabilitation plan to the 4 conditionally approved banks (Cho Hung Bank, Commercial Bank of Korea, Hanil Bank and Korea Exchange Bank) for the purpose of evaluating feasibility of banks' rehabilitation plans.
- This template was developed by World Bank consultant Arne Berggren, McKinsey Inc. and Arthur Andersen and adopts feasibility check techniques used in many other countries.
- The process of filling in necessary information as required by this template will give banks an opportunity to internally assess the feasibility of their own implementation plans.
- The review team of banks' implementation plans within FSC will evaluate each bank's plan through interviews with bank personnel and separate in-depth analysis combined with input from template evaluation results. In this regard, these templates will serve as a useful check tool through the overall evaluation process of banks' rehabilitation plans.
<Attachment> Bank Rehabilitation Plan Template
Bank Rehabilitation Plan Template
The bank rehabilitation plan template addresses issues relating to bank management, including management strategies and techniques, organizational structure and financial status, in a questionnaire format and as such serves as a useful tool in preparing for and modifying implementation plans. It also assists the Financial Supervisory Commission (FSC) in employing an objective and fair criteria in evaluating implementation plans of bank rehabilitation.
o Success conditions of rehabilitation plan
o Guidance notes
- Overall strategy
- Core skills
- Problem assets resolution plan
- Strategic alliance options
- Structural changes : asset restructuring
- Key risk factors
- Financial projections
- Recapitalization plan
o Financial reporting package
3. Usage of Template in Other Countries
o Bank rehabilitation plan templates were utilized in the government-led banking sector reform in Sweden in the early 1990s and ever since has been adopted at other countries as well.
o Upon submission of implementation plans containing necessary improvement measures in accordance to prescribed guidelines, a TOR containing performance targets was established between the government and respective banks. The government evaluated bank's performance against these plans and ordered appropriate measures.
4. Future Plans
o On July 30th FSC will hold a workshop to explain related details to the 4 conditionally approved banks and will hold additional workshops if necessary.
o FSC will continue to provide assistance to individual banks as they further adjust their implementation plans.
¡Ø The underlying template may be altered to take into account individual bank's special attributes after discussions with banks
¡Ø The parties involved in the development of the template along with experts within FSC will take part in the analysis of template evaluation results
Visit our home page (www.fsc.go.kr) for previous and future releases.
Structural Reform Planning Unit
Financial Supervisory Commission