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from Financial Regulatory Forum:

South Korea to push for naked short selling of bonds

By Cheon Jong-woo and Seo Eun-kyung
SEOUL, Nov 20 (Reuters) - A top South Korean regulator said on Friday the authorities would take steps to encourage local and foreign banks to use naked short selling of bonds, a move analysts said could trigger a flood of foreign buying.

Kim Jong-chang, governor of the Financial Supervisory Service (FSS), said in a revised statement that the regulator would discuss guidelines on naked short selling of bonds, when an investor sells a bond that has not yet been borrowed.

The move comes as South Korea has been seeking inclusion in Citigroup's World Government Bond Index (WGBI) in an effort to attract more foreign investors to the domestic bond market, for which it offered tax advantages and allowed application of the international settlements system.

"We plan to hold discussions with related agencies to draw up guidelines on short-selling for bonds," Kim said in a speech to a forum on the local bond market.

from Financial Regulatory Forum:

S.Korea restricts trading in FX forwards

   By Seo Eun-kyung and Cheon Jong-woo
   SEOUL, Nov 19 (Reuters) - South Korea announced measures on Thursday aimed at tightening control over foreign exchange liquidity to make the banking system less vulnerable to the capital flight seen during the financial crisis.
   The Financial Services Commission, a financial watchdog, said the measures would enhance the soundness of banks' foreign currency assets in Asia's fourth-largest economy that is heavily reliant on exports.
   But the regulator said the country would not try to directly control foreign currency liquidity conditions at foreign bank branches in the country, although the branches would be subject to new regulations on forward deals.
   Authorities appear to be looking at ways to avoid a repeat of the capital flight that occurred during the global financial crisis, partly triggered by worries about the ability of companies to roll over their foreign debt liabilities during the global credit crunch.
   One measure called on banks to hold at least 2 percent of their total foreign assets in foreign treasury bonds rated A or above, or set aside a certain amount of safe foreign assets, such as treasuries, in proportion to the value of liabilities maturing within a year.
   The measure will not apply to foreign bank branches in the country. However, restrictions were placed on both local banks and foreign bank branches in trading foreign exchange in forward markets.
   "Exporters' excessive FX hedging boosted short-term foreign currency debts worsening the credit crisis last year. As the economy heavily relies on external factors, we may face the same situation if we experience another crisis," said Jeong My-young, a currency strategist at Samsung Futures.
   "The authorities are showing their determination to minimise the potential impact from hedging practices," she added.
   The steps are expected to weaken bets for a firmer won <KRW=> as exporters will be less aggressive in buying the local currency, traders said.
   A large chunk of foreign currency debt relates to forward currency hedging by shipbuilders -- South Korea is home to the world's three biggest such as Hyundai Heavy Industries <009540.KS> and Daewoo Shipbuilding <042660.KS> -- to cover billions of dollars in new ship orders.
   Banks have had to borrow short-term dollars to square their foreign-currency positions after taking up dollar/won forward offers from shipbuilders.
   For a FACTBOX on the measures, click here. [ID:nSEO196381]
   "Next year, the won will not necessarily rise further," said a currency trader at a foreign bank in Seoul.
   Reflecting the view, the won turned lower with falling as much as 0.4 percent in the morning, although it is up almost 9 percent since the start of the year. (Additional reporting by Kim Yeon-hee; Editing by Neil Fullick) ((jongwoo.cheon@thomsonreuters.com; +82 2 3704 5665; Reuters Messaging;jongwoo.cheon.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))
Keywords: KOREA ECONOMY/CONTROL 
  
Thursday, 19 November 2009 05:35:09RTRS [nSEO238632] {C}ENDS

from Photographers' Blog:

Surrounded by demonstrations in South Korea

It was October, 1990 when I was on a street in central Seoul for the first times as a news photographer. My first job: to cover an anti-government demonstration by students and workers. Protected by a helmet and gas mask, I shot pictures with a Nikon FM2 without the help of a motor drive. It was a battle. The protesters, hundreds of them, had steel bars, stones and petrol bombs. They were forced back by riot police, armed with tear gas, heavy sticks and hard-edged shields.

It was in those last days of the country’s period of autocratic rule, riots and mayhem had become almost daily routine. Sometimes, the photographers, including me, were victims of attack from both sides

from Financial Regulatory Forum:

S.Korea considering steps to boost bank liquidity

SEOUL, Nov 11 (Reuters) - South Korea is looking at measures to enhance foreign currency liquidity at banks, a top regulator said on Wednesday, which reportedly may require them to hold U.S. Treasuries as a portion of their foreign assets.

Chin Dong-soo, chairman of the Financial Services Commission, told reporters that the authorities were in discussion over several measures on bank liquidity, without elaborating.

When asked, he did not deny the possibility of having banks hold a level of U.S. Treasuries in their foreign currency assets.

from Left field:

Third time lucky for Pyeongchang?

pyeongchangWith the race for the 2018 winter Games now officially underway, and with the surprise choice of Rio de Janeiro for 2016 fresh in the mind, bid cities will be asking themselves whether paying your Olympic dues is the key factor in getting the Games.

If so, Pyeongchang will have the advantage in the race with Munich and France's Annecy, with a decision set for 2011.

from Financial Regulatory Forum:

S.Korea mulls controls on foreign banks’ forex liquidity

SEOUL, Oct 16 (Reuters) - The South Korean government is considering controlling foreign currency liquidity at branches of foreign banks in the country to cope with potential financial market crises, a senior finance ministry official said.

The country has regulations on foreign currency liquidity ratios for local banks, but not branches of foreign banks.

from Financial Regulatory Forum:

S.Korea president: world economic crisis not over

South Korean President Lee Myung-bak    SEOUL, Oct 13 (Reuters) - South Korean President Lee Myung-bak said on Tuesday it was premature for the country to end its crisis management status, saying the world economy was not out of the woods yet.
   "I believe our government must maintain its crisis management system for the time being because the world economy has not come out of the crisis yet," a statement from the presidential Blue House quoted Lee as saying during a scheduled cabinet meeting.
    Later, Finance Minister Yoon Jeung-hyun told a parliamentary session government mortgage lending controls imposed last month were taking effect as real estate prices in the capital area were showing signs of stabilising.
   "Real estate prices that had been growing fast in the capital areas are now stabilising after the introduction of DTI (debt-to-income ratio) measures," he said, referring to the government's move last month to limit the amount of mortgage loans depending on the borrower's income.
   The comments came after the central bank chief's remarks giving credit to the lending controls and calling for caution about economic optimism dampened expectations among investors for an interest rate increase this year. [ID:nSP479672]
   The Bank of Korea has held the benchmark 7-day repurchase agreement rate <KROCRT=ECI> steady at a record-low 2.0 percent for the past eight consecutive months after reductions totalling 3.25 percentage points over four months since last October.
   Its governor, Lee Seong-tae, expressed in August and September his concern about rising housing prices, convincing investors to price in heightened risk of an early increase in interest rates. (Reporting by Yoo Choonsik; Editing by Jonathan Hopfner) ((choonsik.yoo@thomsonreuters.com; +82 2 3704 5580; Reuters Messaging: choonsik.yoo.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)) Keywords: KOREA ECONOMY/CRISIS 
  
Tuesday, 13 October 2009 03:56:31RTRS [nSEO367164] {C}ENDS

from Financial Regulatory Forum:

S.Korea to restrict FX borrowing, excessive hedging

A South Korean bank clerk shows new 5,000-won ($4.93) bank notes at the headquarters of Woori Bank in Seoul January 2, 2006. The Bank of Korea begun to distribute on Monday the new 5,000-won bank notes, the second-highest denomination in the country's currency, which is aimed to prevent counterfeiting and forgery attempts for public use, local media reported. REUTERS/Kim Kyung-Hoon    Sept 25 (Reuters) - South Korea is discussing measures to crack down on excessive foreign-currency borrowing by banks, Chin Dong-soo, chairman of the Financial Services Commission, said.
   The timing of the proposed measures may be flexible, depending on decisions on global standards by the Financial Stability Board, the G20's regulation coordination arm, he said.
   For a related story, click on [ID:SEO144752]
   Following are the planned steps Chin unveiled at a briefing.
   -- Tighten criteria on foreign currency liquidity ratios by differentiating weightings of foreign assets by retrieval probability
   -- Make obligatory the holding of safe foreign assets such as foreign currency-denominated bonds with ample liquidity and high credit ratings
   -- Set risk management standards on foreign derivatives transactions to crack down on excessive forex hedging and speculative trading
   -- Increase the obligatory ratio of foreign borrowing with more than one year maturity to 110 percent of total foreign borrowing in 2009 and 120 percent in 2010, from the current 80 percent
   -- Impose a ceiling on foreign asset size and leverage ratios in proportion to capital to restrict foreign asset growth
   -- Tighten disclosure rules over currency hedging costs from asset management companies, which had been blamed for banks' rush to borrow short-term debt
    (Reporting by Kim Yeon-hee in SEOUL; Editing by Jonathan Hopfner)
  ((yeonhee.kim@thomsonreuters.com; +82 2 3704 5646; Reuters Messaging: yeonhee.kim.reuters.com@reuters.net))
  ((If you have a query or comment on this story, send an email to newsfeedback.asia@thomsonreuters.com))
Keywords: KOREA ECONOMY/ 
  
Friday, 25 September 2009 05:33:48RTRS [nSEO112172] {C}ENDS

from Financial Regulatory Forum:

S.Korea to take action on abnormal capital moves

KOREA    SEOUL, Sept 7 (Reuters) - South Korea will take aggressive actions if there are any abnormal movements in capital, its top financial regulator said on Monday, amid growing concerns about adverse effects from abundant short-term liquidity. "As for the trends in short-term funds, household debts and corporate lending, we will conduct vigilant monitoring and take aggressive actions on any tipping effect or abnormal movement of capital," Chin Dong-soo, chairman of the Financial Services Commission, told reporters.
   The commission's implementation arm, the Financial Supervisory Service, expanded from Monday limits on mortgage lending to the whole of the capital Seoul and two adjacent areas to put a brake on growing home-backed borrowing. (Reporting by Yoo Choonsik; Editing by Jonathan Hopfner) ((choonsik.yoo@thomsonreuters.com; +82 2 3704 5580; Reuters Messaging: choonsik.yoo.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)) Keywords: FINANCIAL/KOREA CAPITAL 
  
Monday, 07 September 2009 04:40:00RTRS [nSEW000134] {C}ENDS

from Financial Regulatory Forum:

S.Korea takes measures to curb mortgage borrowing

Apartment houses, office buildings and residences are seen in central Seoul September 1, 2009. Housing prices across South Korea rose for a fifth consecutive month in August from July, although staying below year-earlier levels, data from the country's top lender showed on Tuesday.  REUTERS/Lee Jae-Won (SOUTH KOREA CITYSCAPE BUSINESS)    SEOUL, Sept 4 (Reuters) - South Korea said on Friday it would impose limits on mortgage borrowing in the capital Seoul and two nearby areas, effective from Monday.
   Under the move, the amount of borrowing on homes will be limited by the borrower's income rather than the value of the home. (Reporting by Yoo Choonsik; Editing by Jonathan Hopfner) ((choonsik.yoo@thomsonreuters.com; +82 2 3704 5580; Reuters Messaging: choonsik.yoo.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)) Keywords: KOREA ECONOMY/MORTGAGE 
  
Friday, 04 September 2009 08:15:17RTRS [nSEO324023] {C}ENDS

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