S. Korea to guarantee foreign currency deposits

SEOUL, Nov. 3 (Yonhap) -- South Korea's financial watchdog said Monday it plans to guarantee foreign currency deposits if a financial institution goes bankrupt, in a move to help lenders secure liquidity.

Currently, the government guarantees only Korean currency-denominated deposits of
50 million won (US$38,461) or below per individual.
"The government plans to provide such a guarantee for foreign currency deposits
as well," said an official at the Financial Services Commission (FSC). "As soon
as a related law is revised, the government plans to implement it."
The state guarantee for foreign currency deposits is also to be capped at 50
million won or below.
South Korean lenders have been suffering from a dollar shortage in the wake of
the collapse of U.S. investment bank Lehman Brothers Holdings Inc. and the
subsequent credit crunch.
Last week, the Bank of Korea, the country's central bank, announced that it had
reached an agreement with the U.S. Federal Reserve on a $30 billion currency swap
aimed at thawing the frozen financial system here.