Economics
Election Rout May Scuttle Call for Bank of Korea Debt Buying
- Park's party had proposed central bank purchase more bonds
- Other economic bills proposed by Park also expected to stall
Bank of Korea headquarters in Seoul.
Photographer: Jeon Heon-Kyun/EPAThis article is for subscribers only.
The election setback suffered by South Korea’s ruling party is expected to undermine its push for more aggressive action by the central bank, including debt purchases, Goldman Sachs Group Inc. and KB Investment & Securities Co. said Thursday.
In its campaign platform released last month, the ruling Saenuri party suggested that the Bank of Korea buy bonds issued by the state-run Korea Development Bank to provide more funds for restructuring companies, and purchase mortgage-backed securities to help extend loan maturities and ease nation’s household debt burden. The central bank doesn’t have a mandate to directly buy the securities; the parliament would need to approve the changes.