Proposal of Quantitative Easing

Kang Bong-kyun, former finance minister in Kim Dae-Jung Government and the new Saenuri Party co-chief campaigner for the April 13general election, asked the Bank of Korea to adopt quantitative easing policy.
Kang Bong-kyun, former finance minister in Kim Dae-Jung Government and the new Saenuri Party co-chief campaigner for the April 13general election, asked the Bank of Korea to adopt quantitative easing policy.

 

The ruling Saenuri Party decided to ask the Bank of Korea to adopt quantitative easing policy as the central banks of advanced economies are doing in order to deal with the current situation in which a low interest rate is not leading to corporate investment and money can be supplied directly from the Bank of Korea to those in need of it.

Kang Bong-kyun, former finance minister in Kim Dae-Jung Government and the new Saenuri Party co-chief campaigner for the April 13 general election, suggested the central bank’s direct acquisition of commercial banks’ mortgage-backed securities (MBS) and the extension of the mortgage loan repayment period to 20 years on an installment basis. At present, the Bank of Korea is putting a curb on mortgage loans in order to control an increase in household loans.

Kang also said that it would have large-scale corporate restructuring started, led by state-run banks, as bashing large corporations advocated by opposition parties can be no solution to youth unemployment. According to Kang, the funds required for the restructuring are to be prepared by means of, for example, the disposal of companies owned by the state-run banks, examples of which include Daewoo Shipbuilding & Marine Engineering currently owned by the Korea Development Bank (KDB).

At the same time, the ruling party’s joint chief campaigner proposed an increase in economic growth rate based on the input of a large amount of financial resources while advocating a significant increase in SOC and R&D investments and tax policy focusing on economic growth. He promised that the ruling party would expand tax credits with regard to corporate investments and R&D expenditures. Furthermore, Kang mentioned that he would facilitate highly-educated foreigners’ access to permanent residency in South Korea, expand dual nationality for over seven million Koreans living abroad and establish a government organization for them. 

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