The financial regulator will set up companies specializing in debt restructuring programs next year, seeking to let them take over jobs from lenders struggling to manage debt-driven corporations, The Korea Times reported. The Financial Services Commission (FSC) said Friday it will establish debt-restructuring companies by collecting funds from banks. About 10 financial institutions are expected to join the project, including the state-run Korea Development Bank (KDB) and the Export-Import Bank of Korea (Korea Eximbank). "How much do bankers know about the shipbuilding industry?

While other countries fret over banks that are too big to fail, South Korea is grappling with the concept of systemically important human beings. Last week President Park Geun-hye announced a special pardon for Chey Tae-won, scion of the founding family of SK Group, South Korea’s third-biggest chaebol conglomerate. Mr Chey was halfway through a four-year jail sentence for embezzling more than $40m from SK companies — his second conviction for defrauding shareholders. But the country’s main business lobby groups campaigned for Mr Chey’s release on the basis of his importance to the economy.

South Korea's Daewoo Shipbuilding & Marine Engineering Co Ltd said on Monday it would sell non-core assets, and shut down or exit non-essential units as part of restructuring after a multi-billion dollar loss in the April-June quarter, The Economic Times reported. Daewoo Shipbuilding late last month reported a provisional second-quarter operating loss of 3.03 trillion won ($2.61 billion), citing construction delays on offshore projects such as oil and gas rigs.

With youth unemployment near a 15-year high and the government planning to raise the retirement age, intergenerational conflict over jobs is rising in South Korea, Bloomberg News reported. The jobless rate for workers aged 15 to 29 touched 11 percent earlier this year and is about four times higher than for those aged 40 and above. At the other end of the spectrum, Korea has an underdeveloped pension system and the highest elderly poverty rate in the OECD, as companies push employees in their fifties into early retirement to contain costs.

The plight of South Korea’s 6m contract workers and the polarisation of the 18m-strong workforce goes to the heart of the country’s reform challenge, the Financial Times reported. President Park Geun-hye has put the labour market at the core of structural reforms aimed at reviving economic growth. South Korea’s economy grew just 0.4 per cent in the last three months of last year from the previous quarter — the slowest pace for two years. “Our economy is at a crossroads,” she said recently in a meeting with business leaders.

South Korea’s government is fighting to address the dangers of the nation’s fast-rising household debt burden — even as critics accuse it of stoking the credit boom through deregulation aimed at boosting the housing market, the Financial Times reported. Economists have raised fears over the country’s heavy household debt, which has risen steadily since the late 1990s to more than 160 per cent of disposable incomes at the end of last year — one of the highest levels of any developed nation.

South Korean bulker operator Daebo International Shipping has filed for bankruptcy protection in the Southern District of New York, TradeWinds News reported. The Chapter 15 petition follows an application to commence rehabilitation proceedings in the Seoul Central District Court, which was submitted on 11 February 2015. Since then, at least five creditors have filed lawsuits against Daebo and its affiliates in the US, which is why observers say they aren't surprised by today’s revelation.

A third dry cargo shipper has filed for bankruptcy this month following a collapse in freight rates to historic lows in what shippers call the worst market conditions since the 1980s, Commodities Now reported. South Korea's Daebo International Shipping Co Ltd filed a court receivership, a form of corporate bankruptcy, on Feb. 11, mainly due to poor dry bulk market conditions, a company official said on Monday. It is the third known bulk shipper bankruptcy this month.

A local court said Wednesday it has decided to commence a receivership program for midsize South Korean builder Dongbu Corp., which has recently been hit by financial troubles amid a slump in the construction industry, the Yonhap News Agency reported. The decision by the Seoul Central District Court came just a week after the construction arm of the country's 18th-largest conglomerate Dongbu Group filed for the receivership program after admitting it was unable to repay the 261.8 billion won (US$238 million) it had borrowed from local banks.

More South Korean households are piling on debt at the fastest rate in a decade as the government is using credit to stimulate sluggish consumption, the Financial Times reported. Choi Kyung-hwan, who took office as finance minister in July, has launched a $40bn stimulus package, warning of Japan-style stagnation taking hold in Asia’s fourth-largest economy.