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The escalating confrontation between the government and bank unionists is pushing the nation perilously close to the brink of financial disaster.

The public anxiety over the clash is all the more acute in wake of the recent doctors' strike over medical service reforms which resulted in the tragic loss of life.

As widely expected, bank unionists gave overwhelming support to their leaders' call for a nationwide strike starting July 11 in opposition to the financial authority's plan to integrate weak banks under a financial holding company.

The vote outcome increased the likelihood of the worst-case scenario taking place, dealing a heavy blow to the national economy which experts say must continue on its growth path to ensure the nation escapes completely from the shadow of the recent financial crisis.

Experts fear that the walkout by bank workers may bring the nation's electronic financial networks to a stop, paralyzing the entire domestic financial system.

"Banks' electronic networks are the blood vessels of the economy. If these vessels are clogged, companies and households will be unable to make financial transactions," an analyst said.

He added that a nationwide strike of bank employees would halt the circulation of checks and promissory notes, causing chain bankruptcies of corporations and households. Fund transfers between banks will also become impossible, giving rise to enormous confusion and inconvenience. The public will also find it impossible to use cash dispensers or pay various charges through banks.

Government officials, however, said such a nightmare scenario will not materialize because contingency plans are in order. They also noted that not all of the 24 domestic banks are expected to participate in the general strike.

Hana Bank, KorAm Bank and the National Agricultural Cooperative Federation have already declared nonparticipation in the July 11 walkout. Shinhan and Korea First banks, which have delayed a vote on the strike to tomorrow, are also likely to stay away from the collective action.

Officials also said even if bank unionists walk out, bank operations will not be disrupted because manager-level bank officials and replacement workers will be put in their place.

But experts said these replacement workers will not be able to provide normal services and expect considerable difficulties for bank customers to make transactions.

To avert the possibility of chain bankruptcies, the government plans to extend the daily closing hours for exchange of corporate promissory notes. The government also plans to exclude the checks and promissory notes issued by strike-affected banks from the inter-bank exchange network.

Banks holding these checks and notes are supposed to circulate them after all banks' operations return to normal.

Officials also plan to annul bankruptices or other losses resulting from the strike.

While preparing these and other emergency measures, top financial officials are stepping up effort to persuade union leaders to sit at the negotiation table. They have reassured that no branch closures and job cuts will be made after the government institutes the planned financial holding company system.

But KFBU leaders have so far turned a deaf ear to the officials' call for restraint and dialog. Underlying their refusal for talks is a deep distrust of financial policymakers. In the first place, they do not take the government promise at its face value. "Once weak banks are put under a financial holding company, the government will downsize operations, close overlapping branches and layoff redundant workers," a KFBU official said.

Root of distrust The root of distrust, however, lies deeper. The official recalled that in the first round of restructuring in 1998, many banks were closed and 45,000 bank employees, about 32 percent of the total bank work force, were laid off in the name of 'pain-sharing.' "But government officials, while imposing burden-sharing on us, did not themselves share any pain. No officials were held responsible for the crisis that caused so much pain for us and the general public."