Watchdog vows to bolster financial market next year

SEOUL, Dec. 31 (Yonhap) -- The national financial regulator said Thursday it will
strengthen local banks' capital adequacy ratios and improve liquidity regulations
to help bolster the financial market in the New Year.

"The Financial Supervisory Service (FSS) will improve regulations on bank's
capital and adopt leverage ratios and liquidity controls in line with domestic
conditions," FSS Gov. Kim Jong-chang said in an e-mailed statement to celebrate a
New Year. Kim did not elaborate on how the watchdog would improve regulations.
The South Korean economy emerged from the worldwide crisis and made noteworthy
growth this year, the governor said, adding a recovery in the financial market
will continue into the next year.
Kim said risk factors linger, however, because the stimulus measures introduced
to spark the economy could create side effects.
"Increased lending to small-and-medium companies and household debts could weigh
on the economy down the road, and the possibility that asset bubbles will
reemerge remains," the governor said.
In order to contain the setbacks, the FSS will take extra care in its ending of
emergency measures adopted during the crisis, Kim said.
Asia's fourth-largest economy grew 3.2 percent in the third quarter from three
months earlier, the fastest expansion in more than seven years.
The government predicted in early December the Korean economy will grow 0.2
percent this year, avoiding an annual contraction, and gain 5 percent next year.
The Bank of Korea forecast 4.6 percent growth next year.
pbr@yna.co.kr
(END)