Resolving to deal with the nonperforming loans of banks, and some pitfalls along the way (July 23, 1999)

Conditions that must first be met in order to deal with nonperforming loans Right now, one of the major issues being discussed among our economic community is that of how to deal with nonperforming loans. Specifically, how to strip them off the balance sheets of banks and pass them over to professional asset management companies that can get the highest results out of them, while allowing our four large State-owned banks to become excellent banks in their own right. I personally feel there are some preconditions to be met in how we deal with this. In other words, I feel a certain process should be followed. If preconditions are indeed met, then handling nonperforming loans should be manageable. In overall terms, disposing of nonperforming loans in order to create truly excellent banks will include the following considerations.