S. Korea to brace for prolonged credit crunch

SEOUL, Sept. 23 (Yonhap) -- South Korea will take "preemptive measures" if the
collapse of investment giant Lehman Brothers results in a prolonged credit
crunch, the country's top economic policymaker said Tuesday.
"Despite U.S. financial instability, local firms maintain a sound level of
foreign currency liquidity," Finance Minister Kang Man-soo told reporters after a
meeting with senior economic officials. "Still, the government will take
necessary preemptive measures, bracing for a prolonged credit crunch."
The meeting was attended by Bank of Korea Gov. Lee Seong-tae, Financial Services
Commission Chairman Jun Kwang-woo and Minister of Knowledge Economy Lee Youn-ho,
as well as other high-ranking officials.
The demise of Lehman sent shock waves across global markets, with South Korea's
key stock and currency markets tumbling earlier last week. Policymakers and
financial experts rushed to soothe the market concerns, saying that South Korea's
exposure to Lehman is limited and its impact will be marginal.
Kang said that the global financial system is stabilizing at a fast pace since
the collapse of Lehman, once the U.S.'s fourth-largest investment bank, thanks to
Washington-led bail-out measures, but there are still factors that could
destabilize the market.
"We will keep a close eye on market conditions and intensify concerted efforts
with related agencies to secure stabilization," Kang said.