SEOUL, Dec 18 (Reuters) - South Korea will launch a 20 trillion won ($15.1 billion) fund in January to help banks replenish capital and encourage them to lend into the cash-strapped economy, the top regulator said on Thursday.
The Financial Services Commission said in a statement the Bank of Korea would lend 10 trillion won to the Bank Recapitalisation Fund, subject to approval by its monetary policy committee.
Banks can voluntarily tap the fund through the sale of new preferred shares and equity-type bonds. Public investors will inject an additional 8 trillion won by purchasing securities it issues, with the state-owned Korea Development Bank set to pump in the remaining 2 trillion won.
($1=1324.0 Won)
(Reporting by Kim Yeon-hee; Editing by Jonathan Thatcher and Keiron Henderson)