S. Korea's finance minister urges joint effort to minimize financial shock

(ATTN: UPDATES with additional in paras 8-10; RECASTS 5th para with closure of stock market)
SEOUL, Aug. 9 (Yonhap) -- South Korea's finance minister urged international cooperation Tuesday to prevent the shock from the downgrading of the U.S. credit rating from lapsing into a global crisis.
"The market especially dislikes uncertainties," Bahk Jae-wan said at a regular meeting of economic ministers. "To prevent uncertainties about the global economy at an early date, there is a need to strengthen international cooperation, along with efforts by individual countries."
The remarks came a day after Bahk and 19 other finance ministers of the Group of 20 (G-20) countries issued a joint statement, vowing to take "all necessary initiatives" to support the world's financial stability.
The joint statement of the G-20, the top global forum for economic cooperation, came on the heels of a decision last week by Standard and Poor's Rating Services to cut its credit rating of U.S. government bonds to AA+ from a sterling AAA, sending ripples through global financial markets.
South Korea's benchmark Korea Composite Stock Price Index (KOSPI) dropped 3.82 percent Monday to close at a 10-month low of 1,869.45. It again plunged as low as 1,684.68 on Tuesday but later recouped some losses to close at 1,801.35, 3.64 percent lower than Monday's close.
Still, Bahk warned against nationalist measures.
"Protectionist measures can be poison for the global economy. Countries must reject protectionism and intensify international cooperation to secure global economic stability that will work toward the public good," he told the meeting.
Meanwhile, the finance ministry said it will inject additional liquidity into the local market if necessary under its prearranged contingency plans.
"Short-term impacts will be inevitable as our economy highly depends on trade and our capital and foreign exchange markets are open to global markets," it said in a report to the National Assembly Finance Committee.
"The government will strengthen its communication with the market to help ease any uncertainties at an early date. And when necessary, it will take measures under the prearranged contingency plans that include increased provision of liquidity."
bdk@yna.co.kr