ID :
199544
Sun, 08/07/2011 - 06:30
Auther :
Shortlink :
http://m.oananews.org//node/199544
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Financial watchdog head calls for stronger measures against liquidity problems
SEOUL (Yonhap) - The head of South Korea's financial watchdog has called for stronger measures to secure foreign currency liquidity to fend off a potential financial crisis stemming from the debt-ridden United States and Europe, officials said Sunday.
"Inflation doesn't undermine a nation immediately, but the foreign currency liquidity problem does topple a nation," Kim Seok-dong, chairman of the Financial Services Commission (FSC), told a meeting last week, a commission official said.
The remarks came after the South Korean stock market took a nosedive and the local currency dropped sharply last week, following the U.S. markets plunge sparked by fears over another global recession and the European debt crisis.
Kim also warned local banks, saying that he will not tolerate banks asking the government to support them when the financial crisis occurs.
In line with Kim's remarks, last month the FSC requested 12 local banks to submit their detailed plans on how to fund foreign currency liquidity in case of financial turmoil.
"Inflation takes a serious toll on people, but he meant that our financial crisis has been caused by the foreign currency sector," said another official.
South Korea has learned the lesson of the importance of beefing up banks' foreign currency liquidity after experiencing the 1997-98 Asian-wide financial crisis and the global financial turmoil.
Banks have been moving to comply with the requests, as Hana Bank issued US$400 million Japanese yen-denominated bonds to secure its foreign exchange liquidity.
"Inflation doesn't undermine a nation immediately, but the foreign currency liquidity problem does topple a nation," Kim Seok-dong, chairman of the Financial Services Commission (FSC), told a meeting last week, a commission official said.
The remarks came after the South Korean stock market took a nosedive and the local currency dropped sharply last week, following the U.S. markets plunge sparked by fears over another global recession and the European debt crisis.
Kim also warned local banks, saying that he will not tolerate banks asking the government to support them when the financial crisis occurs.
In line with Kim's remarks, last month the FSC requested 12 local banks to submit their detailed plans on how to fund foreign currency liquidity in case of financial turmoil.
"Inflation takes a serious toll on people, but he meant that our financial crisis has been caused by the foreign currency sector," said another official.
South Korea has learned the lesson of the importance of beefing up banks' foreign currency liquidity after experiencing the 1997-98 Asian-wide financial crisis and the global financial turmoil.
Banks have been moving to comply with the requests, as Hana Bank issued US$400 million Japanese yen-denominated bonds to secure its foreign exchange liquidity.
