S. Korean banks` foreign-currency borrowing jumps in 2010

SEOUL, Feb. 17 (Yonhap) -- Foreign currency borrowing by South Korean banks
increased this year as their ability to borrow overseas remained solid despite
risk aversion stemming from recent debt problems in southern European countries,
the nation's financial watchdog said Wednesday.
A total of 12 local banks borrowed a combined US$2.74 billion as of Feb. 10 from
the start of 2010 through money borrowing and bond sales with a maturity of over
one year, the Financial Supervisory Service (FSS) said.
The amount of foreign debts taken in about 40 days was a sharp increase from $3.2
billion secured in the three months that ended Dec. 31, according to the
financial regulator.
"Despite recent debt issues in southern Europe, the condition for local banks'
foreign-currency liquidity remained sound," the FSS said in a statement.
The fallout from the debt problem on the South Korean financial market will be
limited, the regulator said, adding local banks hold only $640 million of
exposure or loans to Greece, Italy, Spain and Portugal.
The FSS plans to induce banks to maintain solid foreign-currency liquidity levels
and advise them to set up emergency measures to secure foreign currencies for a
potential currency crisis, it said.
A flurry of maturing foreign debts roiled South Korea in early 2009 when the
global financial turmoil shut off local banks from foreign-currency borrowing.
pbr@yna.co.kr
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