금융구조조정의 재정부담

The Fiscal Costs of Financial Sector Restructuring in Korea

The restructuring of the financial sector in Korea involves substantial government actions, which can have strong fiscal implications. Estimation of the actual fiscal burden will provide a basis for considering potential fiscal response measures to the crisis. However, most discussions on this subject do not distinguish the total size of the initially raised funds from the actual fiscal burden borne by the annual government budget. This paper presents estimates of the actual fiscal costs associated with financial sector restructuring in Korea, calculated on an annual cash-flow basis. The fiscal costs of financial restructuring primarily consist of the annual interest payments on the net debt and the realized losses from the sale of collateral, shares, and assets of restructured financial institutions. According to our results, the total fiscal costs of resolving the non-performing assets of 100 trillion won, which should be reflected in the budget over the next several years, may reach somewhere between 44 trillion won and 63 trillion won, which amount to 10.4% and 15.0% of the current GDP in 1997. This range is estimated based on an optimistic as well as a pessimistic set of assumptions about underlying economic conditions. If the amount of the non-performing assets to be resolved increases to 200 trillion won, the fiscal costs involved will be 79 trillion-113 trillion won.