South Korea's political parties have agreed to pass reform bills to meet the terms of the International Monetary Fund bailout for the country.

The three main political parties said they would pass 13 bills on Monday making sweeping changes to regulation of the finance sector in the country.

The package includes a revised Bank of Korea Act, which makes the bank independent and puts it in charge of controlling the inflation rate.

It also creates a new agency under the authority of the Prime Minister's office responsible for overseeing banks and other financial institutions.

The economic programme agreed by South Korea and the IMF called for the passage of fiscal reforms this year and the parties said this condition would be met.

Kim Dae Jung: compromised with opponents

The announcement of a compromise on Saturday comes just two days after Kim Dae Jung was narrowly elected as President of South Korea.

Markets in Asia fell on Friday in the aftermath of the election win by the opposition leader and because of continuing uncertainties over prospects for the region.

In South Korea, the won fell by more than 10% and stocks dropped by 4%, despite Mr Kim's insistence that he would stick to a proposed $57bn IMF bailout for the troubled South Korean economy.

But the news of quick action to tackle the difficulties within South Korea brought a more positive response.
 

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