08/10/13 11:00:51 M6GheXEd
This is the press release by Standard & Poor's
Published October 13, 2008
URLﾘﾝｸ(www.theasianbanker.com)
Global liquidity squeeze pressures Korean banks' credit quality
Pressure from the global liquidity squeeze threatens to negatively
affect the credit quality of Korean banks, mainly due to their
ongoing foreign currency funding needs, Standard & Poor's Ratings
Services said. Korean banks' foreign currency funding had more
than doubled to $127 billion as of the end of June 2008 since the end of 2005.
The outlook on the sovereign ratings on Korea remains stable at this
time. However, a substantial deterioration in the banking system
would likely require heavy government intervention. In such a case,
the government may need to take on significant additional liabilities
on its balance sheet to ensure financial stability. Although we do not
presently see this scenario as likely, the sovereign credit ratings
on Korea would face downward pressure if this were to occur.