More Bank Run in Korea

From Joongang Daily:

Domin Bank, a savings bank with a capital adequacy ratio below 5 percent, voluntarily decided yesterday to suspend its operations temporarily because of massive withdrawals, becoming the country’s eighth savings bank to close.

The decision took both depositors and financial regulators by surprise since it was the first time that a local bank shut its doors on its own.

Domin Bank, which has six branches in Gangwon, was placed on a watch list last week by the Financial Services Commission. The move triggered a bank run on Domin Bank.

According to Domin Bank, deposits amounting 31.8 billion won ($28.2 million) were withdrawn since last Thursday, including 18.8 billion won on Monday.

The news of Domin Bank’s temporary closure came as FSC Chairman Kim Seok-dong was visiting Mokpo, South Jeolla, where recently suspended Bohae Savings Bank is located.

Kim criticized Domin Bank’s decision.

“This savings bank was supposed to submit a management improvement plan to the FSC by Feb. 24,” said Kim. “We will now have to review whether [the closure] is even legally O.K.”

Bae Joon-soo, senior FSC deputy director, said, “I think it is legally and morally wrong for a financial firm to do such a thing.”

http://joongangdaily.joins.com/article/view.asp?aid=2932614