Politicizing savings banks

Parties are at odds over the causes of the troubles at the Busan Mutual Savings Bank. Their quarrel looks like parents arguing over why their child, now in intensive care, is sick. It is futile to debate the cause of the illness after the infant has died.
The parties are in a blame game. They have yet to finalize the list of witnesses to be called to a hearing on mutual savings banks (MSB). The governing Grand National Party (GNP) has traced the ills of the MSBs to the mistakes and frauds made under the 10-year Democratic Party (DP) rule of Kim Dae-jung and Roh Moo-hyun from 1998 till 2007.
The DP blasted the GNP for seeking to divert its own culpability. It contends that the current ruling camp is fully accountable for the fiasco.
The Busan MSB is terrific fodder for politicization at least from the perspective of the parties. The ruling camp claims that the Busan MSB is under the control of those whose home towns are in the southwestern Jeolla Province. It alleges that the shareholders diverted deposits residents from rival region have kept for projects in the hometown of the major shareholders. This claim might rekindle the simmering regional animosity ahead of the National Assembly and presidential elections next year.
The opposition DP snubbed the claim, saying that the argument is an attempt to hide the Lee administration???s failures and fraud.
The escalating inter-party feuding is attributable to the incompetent prosecution and regulators. Prosecutors should indict rule-breakers in the lending scam. The prosecution has lacked direction. Its top prosecutor resigned prematurely in protest over the National Assembly's purported weakening of its control of the police.
The Financial Supervisory Service is in limbo following the arrests of a few regulators for accepting bribes from MSBs.
Depositors and taxpayers are the main victims. Powerless people have lost part of their MSB deposits. The longer it takes to rescue the MSBs, the more costly it will be in cleaning up their nonperforming debts. An injection of public funds means the use of taxpayers' money.
Lawmakers and regulators should not try to put the cart before the horse. They must take bold actions to save the MSBs, now teetering on bankruptcy. Without swift action, the otherwise-safe MSBs will face contagion.
Regulators should be resolute and swift in shutting down unviable MSBs, and start criminal litigation against owners for mismanagement.
After solving the MSB problem, the National Assembly can look into the cause of their failure so as not to repeat the same mistakes. Few deny that lawmakers are also responsible for the MSB fiasco.
Korea encountered an unprecedented currency crisis in 1997 as legislators wasted time in a blame game over rescuing Kia and other insolvent companies.
It is not late to trace the origin of the illness of the small community banks after curing their disease. Do not fix the stable door after the horses have already bolted.
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