BOK head urges banks to cut short-term borrowing

SEOUL, Nov. 14 (Yonhap) -- The chief of South Korea's central bank urged local
banks Friday to gradually reduce their dependence on sales of bank bonds in a bid
to help stabilize the financial market.

"Amid cautions against credit risks, capital flows have not been smooth in the
financial markets. At this time, banks should aggressively make efforts to
stabilize the market," Bank of Korea (BOK) Gov. Lee Seong-tae said in a meeting
with the heads of nine local banks.
His remarks came as South Korean banks have sold a huge volume of bonds in the
past few years to secure cash for loans to households and companies.
But local lenders are suffering from cash shortages as they have faced troubles
in rolling over debt or raising funds amid the global financial turmoil, which
was sparked by the collapse of investment bank Lehman Brothers Holdings Inc.
The BOK said it will provide liquidity in a timely manner to the financial system
and take preemptive steps to stabilize the market.
sooyeon@yna.co.kr
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