ID :
208828
Thu, 09/22/2011 - 12:49
Auther :
Shortlink :
https://oananews.org//node/208828
The shortlink copeid
Foreign capital outflow top concern for S. Korea: regulator
(ATTN: ADDS remarks in paras 7-8)
By Lee Minji
SEOUL (Yonhap)- South Korea's top financial regulator said Thursday the potential outflow of foreign capital is the biggest concern for the South Korean economy, which is highly vulnerable to external uncertainties.
"The rapid outflow of foreign capital is the area we are most worried about ??? Financial institutions may face difficulties in revolving short-term foreign debts, a situation that resembles the 2008 global financial crisis," Financial Services Commission (FSC) Chairman Kim Seok-dong said in a radio interview.
Overseas investors sold a net 780.6 billion won (US$664.9 million) worth of equities between Sept. 1 and 21, according to the Financial Supervisory Service.
In August, net selling by foreigners came to 5.9 trillion won, as they fled for safe-haven assets following a U.S. credit rating cut and amid lingering eurozone debt risks.
Kim said the country's economy, Asia's fourth-largest, is receiving "big shocks" from the ongoing global economic slowdown due to its openness.
The top regulator said the woes stemming from the eurozone debt crisis, coupled with a recession in the real economy, may last for a "quite long" period due to unclear solutions and a rocky process toward international cooperation.
In a seminar late Thursday, the top regulator restated the importance of keeping foreign liquidity at an appropriate level.
He said South Korea has seen improvements in its foreign exchange liquidity indicators since the 2008 global financial crisis, but said the local finance industry is still vulnerable to European capital, which accounts for around 30 percent of foreign stock and bond investments.
Meanwhile, the regulator stressed no more savings banks face business suspensions within this year unless unexpected situations occur.
The FSC on Sunday suspended seven players with heavy debts and inadequate liquidity ratios as part of its efforts to overhaul the struggling sector, raising concerns the move will trigger a massive deposit withdrawal.
Kim said the financial regulator will step up supervision of the ailing sector and request that savings banks post financial statements on a quarterly basis instead of the previous six-month basis.
By Lee Minji
SEOUL (Yonhap)- South Korea's top financial regulator said Thursday the potential outflow of foreign capital is the biggest concern for the South Korean economy, which is highly vulnerable to external uncertainties.
"The rapid outflow of foreign capital is the area we are most worried about ??? Financial institutions may face difficulties in revolving short-term foreign debts, a situation that resembles the 2008 global financial crisis," Financial Services Commission (FSC) Chairman Kim Seok-dong said in a radio interview.
Overseas investors sold a net 780.6 billion won (US$664.9 million) worth of equities between Sept. 1 and 21, according to the Financial Supervisory Service.
In August, net selling by foreigners came to 5.9 trillion won, as they fled for safe-haven assets following a U.S. credit rating cut and amid lingering eurozone debt risks.
Kim said the country's economy, Asia's fourth-largest, is receiving "big shocks" from the ongoing global economic slowdown due to its openness.
The top regulator said the woes stemming from the eurozone debt crisis, coupled with a recession in the real economy, may last for a "quite long" period due to unclear solutions and a rocky process toward international cooperation.
In a seminar late Thursday, the top regulator restated the importance of keeping foreign liquidity at an appropriate level.
He said South Korea has seen improvements in its foreign exchange liquidity indicators since the 2008 global financial crisis, but said the local finance industry is still vulnerable to European capital, which accounts for around 30 percent of foreign stock and bond investments.
Meanwhile, the regulator stressed no more savings banks face business suspensions within this year unless unexpected situations occur.
The FSC on Sunday suspended seven players with heavy debts and inadequate liquidity ratios as part of its efforts to overhaul the struggling sector, raising concerns the move will trigger a massive deposit withdrawal.
Kim said the financial regulator will step up supervision of the ailing sector and request that savings banks post financial statements on a quarterly basis instead of the previous six-month basis.
