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Top regulator urges banks to beef up FX liquidity conditions
제목 없음
South Korea's top financial regulator on Thursday called on local banks to
bolster foreign exchange liquidity as there is a chance that market jitters may
persist for a considerable period of time.
His remarks came as jitters in the global financial markets increased because clear signs of solving Europe's sovereign debt crisis have yet to appear.
"There is a need to brace for the possibility that external market uneasiness may continue for a considerable period of time," Kim Seok-dong, chairman of the Financial Services Commission (FSC), said in a meeting with heads of local banks.
Kim urged them to beef up their FX liquidity conditions by diversifying funding sources and to closely monitor their foreign currency denominated debt in order to prevent it from squeezing their FX liquidity situations.
According to the FSC, participants shared the view that local banks' capacity to cope with a crisis and their FX liquidity situations are stronger than in the past, but there is a need to brace for rainy days.
Kim called for local banks to continue to diversify borrowing sources by tapping non-dollar regions like the Middle East and Asia.
The dimmer global economic outlook and the eurozone debt problems revived investors' demand for safe assets, pummeling Korea's stocks and currency. The benchmark stock index fell an estimated 6 percent and the Korean won depreciated about 9 percent to the dollar in September.
At the height of the 2008 global financial meltdown, local banks, then saddled with high short-term external debt, had difficulties in refinancing foreign currency loans or borrowing from overseas, leading to a liquidity crunch.
Date
2011.09.29
His remarks came as jitters in the global financial markets increased because clear signs of solving Europe's sovereign debt crisis have yet to appear.
"There is a need to brace for the possibility that external market uneasiness may continue for a considerable period of time," Kim Seok-dong, chairman of the Financial Services Commission (FSC), said in a meeting with heads of local banks.
Kim urged them to beef up their FX liquidity conditions by diversifying funding sources and to closely monitor their foreign currency denominated debt in order to prevent it from squeezing their FX liquidity situations.
According to the FSC, participants shared the view that local banks' capacity to cope with a crisis and their FX liquidity situations are stronger than in the past, but there is a need to brace for rainy days.
Kim called for local banks to continue to diversify borrowing sources by tapping non-dollar regions like the Middle East and Asia.
The dimmer global economic outlook and the eurozone debt problems revived investors' demand for safe assets, pummeling Korea's stocks and currency. The benchmark stock index fell an estimated 6 percent and the Korean won depreciated about 9 percent to the dollar in September.
At the height of the 2008 global financial meltdown, local banks, then saddled with high short-term external debt, had difficulties in refinancing foreign currency loans or borrowing from overseas, leading to a liquidity crunch.
Source: Yonhap News (Sept. 29, 2011)