Graphic = Jeong Seo-hee

As the launch of the bad bank approaches, the Korea Asset Management Corporation (KAMCO) is reviewing the hiring of dedicated staff for bad bank operations. Comparing with past government debt restructuring cases, it seems that at least several dozen personnel will be needed. However, given that the bad bank being pursued this time is the largest-scale debt restructuring in constitutional history and a one-time system, there are concerns that unnecessary administrative costs will increase.

According to the financial sector on the 15th, KAMCO has recently established a strategic business division under the Planning and Coordination Office and assigned 13 employees. The strategic business division will be the organization responsible for related tasks from the establishment of the bad bank to the purchase and liquidation of delinquent claims. KAMCO has established the strategic business division in a task force (TF) format and plans to create a dedicated department when the bad bank begins to officially purchase delinquent claims in October, adding more personnel. In this process, KAMCO is also considering hiring additional staff in consultation with the Ministry of Economy and Finance and the Financial Services Commission.

There are observations within and outside the financial sector that at least several dozen, if not more than 100, personnel will be needed for this bad bank. Each time similar debt restructuring policies were pursued in the past, the personnel in the relevant departments within KAMCO increased and decreased by dozens. According to data from Rep. Lee Heon-seung of the National Policy Committee, the number of employees at KAMCO's household support headquarters increased from 172 to 226 during the Park Geun-hye administration in 2013. The household support headquarters is the organization within KAMCO responsible for household debt and debt restructuring, and the number of organizational members increased significantly after the establishment of the National Happiness Fund in 2013.

After that, the number of employees in the household support headquarters decreased to 168 in 2017 and increased to 187 in 2018. At that time, the Moon Jae-in administration established a foundation to support long-term delinquents. The Yoon Suk-yeol administration also increased the number of employees in the household support headquarters to 179 from a low of 141 in 2022, when it created the new start fund. This pattern of increasing and then decreasing related personnel according to need has been repeated.

Graphic = Son Min-kyun

Considering that the current government's bad bank is the largest scale of debt restructuring to date, more personnel and expenses are expected to be invested than in past cases. The expected amount of debt restructuring through the bad bank is 16.4 trillion won. The previously launched National Happiness Fund liquidated 15.8 trillion won in debt over six years, but the current operation plans to purchase and liquidate a larger amount of debt at once. The debt restructuring target amount for the foundation supporting long-term delinquents was about 6.2 trillion won.

In light of this, concerns are raised that it is inappropriate to invest large-scale personnel and expenses for a one-time policy. While the large-scale personnel and expenses for the bad bank are inevitable, there is no plan for how these resources will be used after the debt relief. Representative Lee Heon-seung pointed out, "It is an inefficient approach to organize and temporarily arrange personnel while promoting the largest scale of debt restructuring in history." He emphasized that "the bad bank policy should not be promoted for one-time performance and that sustainable policies for low-income households, such as post-debt relief support and financial education, should be linked."

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