S. Korea's financial market stable amid U.S. bank collapses: finance minister

Economy 08:49 March 14, 2023

By Kang Yoon-seung

SEOUL, March 14 (Yonhap) -- South Korea's financial market remains stable despite the failures of two U.S. banks, but the government will promptly come up with stabilization measures, if necessary, the finance minister said Tuesday.

On Friday, U.S. regulators shut down Silicon Valley Bank (SVB) in the largest failure of a U.S. bank since the 2008 financial crisis. It was followed by the collapse of the New York-based Signature Bank.

U.S. financial authorities vowed to protect all deposits at the banks.

"Following the measures made by the U.S., the South Korean main bourse, as well as the secondary bourse, gained ground (the previous day) on the back of foreigners' buying," Finance Minister Choo Kyung-ho said ahead of a meeting with officials from other financial regulators.

On Monday, the benchmark Korea Composite Stock Price Index (KOSPI) added 0.67 percent, while the tech-heavy KOSDAQ market edged up 0.04 percent despite concerns over the jitters, as some investors bet on the Fed slowing down its rate hikes.

Choo also reiterated his view that the situation will have a limited impact on the South Korean market.

"Local financial institutions have different asset and debt structures, compared with SVB. They have a strong liquidity and hold sufficient fundamentals to withhold a temporal shock," the minister added.

Choo, however, said the latest collapses of the U.S. banks may lead to further uncertainties in the financial market, as the global inflation has not yet been brought under control.

"If necessary, under a close coordination with related organizations, we will promptly roll out market stabilization measures," Choo added.