ID :
48318
Sun, 03/01/2009 - 14:44
Auther :
Shortlink :
https://www.oananews.org//node/48318
The shortlink copeid
Think tank warns against panic over Eastern Europe financial woes
SEOUL, March 1 (Yonhap) -- Participants in the South Korean financial market
should refrain from being oversensitive to Eastern European banking turmoil
though it may affect the local economy, a think tank said Sunday.
"There is no need to react to concerns over the Eastern European financial crisis
with oversensitivity, though it is coming as a negative factor to the Korean
economy," Samsung Economic Research Institute in a report.
It is possible to take proactive steps to mitigate the effects of the crisis, as
specifics -- including the affected countries and the extent of losses -- are
clearly known, said the institute affiliated with Samsung Group, South Korea's
top conglomerate.
Banks in Eastern Europe are said to be saddled with rising bad debts as companies
and consumers are having trouble meet their payments amid a deepening global
economic downturn. There have also been worries about sovereign defaults in the
region.
"If Western European countries work together with international financial
agencies properly, it will be possible to prevent a chain reaction of defaults by
Eastern European nations," the think tank said.
However, the crisis could lead to a tumble in South Korean exports of durable
goods to Eastern European nations and ultimately to Western Europe, the think
tank said.
The report comes as the South Korean financial market has been in turmoil due to
jitters over a global credit crunch and the Eastern European crisis. The local
currency has dropped 22 percent against the U.S. dollar so far this year, with
the key stock index KOSPI falling 5 percent.
In a separate report, a financial think tank dismissed the possibility that the
Eastern European situation may trigger a crisis similar to that sparked by the
collapse of investment banking giant Lehman Brothers last year.
"The Easter European crisis is not likely to result in severe turmoil here, but
preemptive measures should be taken to relieve investor jitters," said Song
Jae-keun, an economist at the Korea Institute of Finance.
pbr@yna.co.kr
(END)
should refrain from being oversensitive to Eastern European banking turmoil
though it may affect the local economy, a think tank said Sunday.
"There is no need to react to concerns over the Eastern European financial crisis
with oversensitivity, though it is coming as a negative factor to the Korean
economy," Samsung Economic Research Institute in a report.
It is possible to take proactive steps to mitigate the effects of the crisis, as
specifics -- including the affected countries and the extent of losses -- are
clearly known, said the institute affiliated with Samsung Group, South Korea's
top conglomerate.
Banks in Eastern Europe are said to be saddled with rising bad debts as companies
and consumers are having trouble meet their payments amid a deepening global
economic downturn. There have also been worries about sovereign defaults in the
region.
"If Western European countries work together with international financial
agencies properly, it will be possible to prevent a chain reaction of defaults by
Eastern European nations," the think tank said.
However, the crisis could lead to a tumble in South Korean exports of durable
goods to Eastern European nations and ultimately to Western Europe, the think
tank said.
The report comes as the South Korean financial market has been in turmoil due to
jitters over a global credit crunch and the Eastern European crisis. The local
currency has dropped 22 percent against the U.S. dollar so far this year, with
the key stock index KOSPI falling 5 percent.
In a separate report, a financial think tank dismissed the possibility that the
Eastern European situation may trigger a crisis similar to that sparked by the
collapse of investment banking giant Lehman Brothers last year.
"The Easter European crisis is not likely to result in severe turmoil here, but
preemptive measures should be taken to relieve investor jitters," said Song
Jae-keun, an economist at the Korea Institute of Finance.
pbr@yna.co.kr
(END)
