earticle

영어

The banking crisis(1997) in Korea has ushered in a new strategy for safe and sound banking and risk management. To allocate loanable funds, the banks no more rely on the government instructions. Workout is the mechanism designed and supported by the government to prevent domino effect of big companies; failure and consequent bank run. It is an extended industrialization measures. Econocrats have favored direct intervention into exit mechanisms of big companies to judicial procedures including company reorganization procedures. This paper focused on the corporate restructuring implemented by banks. And suggests two pivotal plans of improvement. First, it is important to revise the Corporate Restructuring Promotion Act. The Act established basically the methodological basis of smoothing promotion of the corporate restructuring by market autonomy. There are many problems, however, on the rights and duties of party interested. The Act has poor provisions. Secondly, it is also important to promote the effectiveness of the credit risk ordinary evaluation system. Managing the corporate restructuring system by financial institution's autonomy is based on the credit risk ordinary evaluation system. If both the evaluation of the corporation and the selection of an insolvent enterprise are not accomplished strictly, it is no use mentioning the effective management of the corporate restructuring of an insolvent enterprise.