Prompt Corrective Action(PCA) in Korea is introduced as a way of prudent regulatory measure. For the effective implementation of PCA, current three step wise corrective action system could be modified into four step wise system where the preventive corrective measures are more emphasized in the early stage of insolvency. Implementation of regulatory forbearance in the last stages of insolvency should be limited under the restricted condition. Measures which minimize the resolution costs also help to reduce the incentive of forbearance by regulatory body. Due diligence conducted by Korea Deposit Insurance Cooperation before the closure of the financial institution  could facilitate the resolution process in more cost efficient way and enable the prompt reimbursement, which contribute to the minimization of resolution costs. Considering the limitation of BIS capital ratio in manifesting the true risk condition of financial institutions, other measures of capital ratios and market index could be utilized.

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