South Korea’s top financial regulator on Friday slammed “biased” analyst reports on the country by foreign brokerages and asked them to “properly” inform the market of the economy’s resilience.
“A few foreign securities companies have released reports that made arbitrary judgments about the Korean economy. They said Korea will be one of the most vulnerable to debt woes in Europe,” Kwon Hyouk-se, governor of the Financial Supervisory Service, told local chiefs of foreign financial institutions at a breakfast meeting.
“I ask financial institutions to look at things objectively and better inform the market of the economy’s resilience.”
Financial Supervisory Service Gov. Kwon Hyouk-se (right) speaks during a meeting with a group of CEOs of foreign financial companies operating in Korea at Bankers’ Club in downtown Seoul on Friday. (Ahn Hoon/The Korea Herald)
Kwon’s gathering of foreign chiefs came two days after President Lee Myung-bak convened an emergency meeting of top economic policymakers thought to have been scheduled to forge government reaction to the market trouble this week following the debt crisis in the U.S. and Europe.
Lee instructed Finance Minister Bahk Jae-wan, Bank of Korea Governor Kim Choong-soo, Kwon of FSS and other top policymakers to promote the soundness of Korean financial firms and its enhanced ability to absorb external shocks.
“Korea has a relatively low level of external debt and enough foreign exchange reserves to defend the market against sudden capital movement,” Kwon reiterated.
The Friday gathering by Kwon was attended by local chiefs of nine foreign brokerages, three foreign asset management companies including Russ Gregory of Macquarie Securities, Yang Ho-chull of Morgan Stanley and Kim Jong-yun of Goldman Sachs.
Deputy Finance Minister Choi Jong-ku a day earlier hosted a media briefing for foreign press correspondents in Seoul where he said Seoul had “enough policy room” to cope with global uncertainties.
A report from Morgan Stanley in July said companies in Korea, Thailand, and Indonesia are more likely to default than others in Asia should capital exit quickly on debt woes in Europe.
“The biggest risk to Asian credit markets of a worsening European debt crisis is a deterioration in global funding markets,” the investment bank’s chief Asia credit strategist, Viktor Hjort said in a July 25 report.
By Cynthia J. Kim (cynthiak@heraldcorp.com)
