S. Korean PM urges appropriate measures against market instability

By Kim Boram
SEOUL, Sept. 17 (Yonhap) -- South Korean prime minister on Wednesday called for efforts by all relevant authorities to minimize the ripple effect from the U.S. financial crisis.

"The U.S. financial market is very unstable, and a short-term effect on the
Korean economy is unavoidable," said Prime Minister Han Seung-soo at a
cabinet meeting. "Yesterday's stock market and foreign exchange market are
indicative of that."

Lehman Brothers, once the fourth-largest investment bank in the U.S., filed for
bankruptcy on Sunday, sending shockwaves across financial markets around the
globe.

On Tuesday, the first trading day after Korea's three-day Chuseok holidays, the
country's benchmark stock market, KOSPI, plummeted 90.17 points, or 6.1 percent,
to 1,387.75, and the local currency ended at 1,160 won to the dollar, the lowest
in 49 months and down 50.9 won from Friday's close.

"The U.S.'s financial woes are not likely to end soon," Han said,
"cooperation among the Finance Ministry, the Financial Services Commission
and the Bank of Korea is essential."

"Those authorities should deliver a coherent message to the market and come
up with prompt and appropriate measures in mutual cooperation." said Han.

He added, "As we have seen during rumors of a 'September crisis',
psychological pressure greatly affects the market, so we need to prevent public
anxiety from spreading."

Korea's local financial market had been jittered by widespread speculation about
a "September crisis," spawned by fears of mass withdrawal of short-term
foreign loans here. But the maturity date passed without marked turbulence,
helped by a U.S. government announcement that it was taking control of Fannie Mae
and Freddie Mac.

brk@yna.co.kr

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