ID :
19799
Wed, 09/17/2008 - 09:01
Auther :
Shortlink :
http://m.oananews.org//node/19799
The shortlink copeid
S. Korea orders Lehman Brothers to halt operations
SEOUL, Sept. 16 (Yonhap) -- The South Korean operations of Lehman Brothers Holdings Inc. were halted by the nation's financial regulator on Tuesday, a day after America's No. 4 investment bank filed for bankruptcy.
In Seoul, stock prices fell sharply and the Korean currency's value against the
U.S. dollar nosedived as concerns escalated about the soundness of the U.S.
financial system amid news that U.S. insurance giant American International Group
Inc. was struggling to survive.
In the wake of the growing unease, government officials have tried to calm the
markets, saying the Lehman's demise would probably erase uncertainties in global
financial markets in the long term.
"In the long term, it could contribute to the easing of the credit crunch by
quickly removing market instability," Vice Finance Minister Kim Dong-soo
told reporters, referring to the U.S. bank's collapse.
Earlier in the day, the Financial Services Commission said it banned the two
Lehman units in Seoul from selling their assets and repaying debts until Dec. 15.
The measure was aimed at "protecting investors at home and preventing
potential chaos in local financial markets," the commission said in the
statement.
Lehman's Seoul units will also be prohibited from receiving deposits, trading
stocks and transferring money overseas, the commission said.
On the stock market on Tuesday morning, which closed on Monday for a public
holiday, the nation's benchmark stock index tumbled more than six percent.
Hit by the sharp drop, program trading of shares listed on both the benchmark
KOSPI and secondary KOSDAQ markets was suspended for five minutes in the morning
trading session.
The Korean won currency also fell nearly three percent against the U.S. dollar as
foreign investors sold the nation's assets.
"The situation in the U.S. financial markets appeared to be bad because
Lehman filed for bankruptcy only three days after it announced a plan to sell its
assets," said Shim Jae-yeop, a senior analyst at Meritz Securities Co. in
Seoul.
Shim said he couldn't rule out the possibility of more failures in other U.S.
financial companies linked to transactions with Lehman.
The nation's finance ministry and the Bank of Korea said they would act "if
necessary."
The vice finance minister Kim said his government will provide liquidity to
stabilize the nation's financial markets in the wake of Lehman's collapse.
"The government and the Bank of Korea will take steps against excessive
fluctuations in foreign exchange markets," Kim said in a breakfast meeting
with officials from the financial regulator and the central bank.
The presidential office of the Blue House said it will hold an emergency meeting
with economy-related ministers later in the day to discuss about potential
measures to stabilize the markets.
As of the end of July, the Lehman units in Seoul had a total of 1.6 trillion won
(US$1.44 billion) in assets from investors, it said.
The 158-year-old investment bank collapsed over the weekend under its heavy
exposure to mortgage losses in the U.S.
South Korean financial companies held about $720 million in securities linked to
Lehman, the commission said on Monday.
(END)
In Seoul, stock prices fell sharply and the Korean currency's value against the
U.S. dollar nosedived as concerns escalated about the soundness of the U.S.
financial system amid news that U.S. insurance giant American International Group
Inc. was struggling to survive.
In the wake of the growing unease, government officials have tried to calm the
markets, saying the Lehman's demise would probably erase uncertainties in global
financial markets in the long term.
"In the long term, it could contribute to the easing of the credit crunch by
quickly removing market instability," Vice Finance Minister Kim Dong-soo
told reporters, referring to the U.S. bank's collapse.
Earlier in the day, the Financial Services Commission said it banned the two
Lehman units in Seoul from selling their assets and repaying debts until Dec. 15.
The measure was aimed at "protecting investors at home and preventing
potential chaos in local financial markets," the commission said in the
statement.
Lehman's Seoul units will also be prohibited from receiving deposits, trading
stocks and transferring money overseas, the commission said.
On the stock market on Tuesday morning, which closed on Monday for a public
holiday, the nation's benchmark stock index tumbled more than six percent.
Hit by the sharp drop, program trading of shares listed on both the benchmark
KOSPI and secondary KOSDAQ markets was suspended for five minutes in the morning
trading session.
The Korean won currency also fell nearly three percent against the U.S. dollar as
foreign investors sold the nation's assets.
"The situation in the U.S. financial markets appeared to be bad because
Lehman filed for bankruptcy only three days after it announced a plan to sell its
assets," said Shim Jae-yeop, a senior analyst at Meritz Securities Co. in
Seoul.
Shim said he couldn't rule out the possibility of more failures in other U.S.
financial companies linked to transactions with Lehman.
The nation's finance ministry and the Bank of Korea said they would act "if
necessary."
The vice finance minister Kim said his government will provide liquidity to
stabilize the nation's financial markets in the wake of Lehman's collapse.
"The government and the Bank of Korea will take steps against excessive
fluctuations in foreign exchange markets," Kim said in a breakfast meeting
with officials from the financial regulator and the central bank.
The presidential office of the Blue House said it will hold an emergency meeting
with economy-related ministers later in the day to discuss about potential
measures to stabilize the markets.
As of the end of July, the Lehman units in Seoul had a total of 1.6 trillion won
(US$1.44 billion) in assets from investors, it said.
The 158-year-old investment bank collapsed over the weekend under its heavy
exposure to mortgage losses in the U.S.
South Korean financial companies held about $720 million in securities linked to
Lehman, the commission said on Monday.
(END)
