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<DIV class=OutlookMessageHeader lang=en-us dir=ltr align=left><FONT
face=Tahoma size=2>Bernhard Seliger<SPAN class=149161508-13122001><FONT
face="BookmanITC Lt BT" color=#0000ff size=3>
wrote :</FONT></SPAN><BR></FONT></DIV>Dear List members,
<P>since the revision of the revision of the Bank of Korea Act in December 31,
1997, the Bank of Korea enjoys legal independence under a single, dominant
goal - price stability - with a formulation very close to similar stipulations
in the European Union's or the former German Deutsche Bundesbank law. Both -
independence and price stability as the main goal - were parts of IMF
conditionality.
<P>However, how far is the Bank of Korea de facto able to make decisions
independently from government?
<P>I found in the daily press numerous instances of government pressure, open
conflict between government and BOK and common decision making in informal
committees.
<P>However, I would be interested in a review of these questions, academic or
newspaper articles and additional data.
<P>I think this question is also interesting for the list, since it is a
detail in the broader question, inhowfar the change of formal institutions
after the crisis of 1997 resulted in conflict with informal institutions and
decision-making processes or how much the informal processes also <A
href="mailto:changed.@maincc.hufs.ac.kr">changed.</A><SPAN
class=149161508-13122001><FONT color=#0000ff> </FONT></SPAN>
<P>
<P><SPAN class=149161508-13122001><FONT color=#0000ff>Somewhat on
point:</FONT></SPAN>
<P><SPAN class=149161508-13122001><FONT color=#0000ff>An
expat colleague -- the credit risk manager at a major international
banking institution -- recently attended one of the creditor meetings convened
by KEB in its capacity as the lead creditor bank for dealing with Hynix
under the recently enacted Corporate Reorganization Promotion Law. This
law was described by DPM/MOFE Jin Nyum in a public forum with members of the
EUCCK as intended to let "market forces operate"; in fact it is a rather
blunt, but in some ways quite subtle, instrument to "force the market" to
operate in ways that are consensually decided behind the scenes. The
curtain came away from the wizardry at the Hynix creditor meeting.
First, the powers that be tried to exclude my colleague -- the only non-Korean
present -- from the meeting on the ground that only one representative
from each bank was permitted (he was accompanied by another colleague acting
as his interpreter). Having been unable to overcome my friend's
recalcitrance, KEB then (rather surprisingly) nevertheless kicked off
the meeting with a statement to the effect that all the banks should support
the latest lunatic bailout proposal for Hynix regardless of the credit
analysis because it was the necessary thing to do "for Korea". Old
habits don't die; maybe they'll fade away, but only if, like the originator of
that trope they're pushed --
vigorously.</FONT></SPAN></P></BLOCKQUOTE></BODY></HTML>