Moody's: Measures will stabilize Korean banks

Moody's Investors Service said it said the proposed measures recently announced by the Korean government to stabilize its financial markets will help ease pressure on domestic banks' foreign-currency funding.

The measures were designed to restore confidence in the banking system and place the banks on equal footing for overseas funding from other banking systems that have received government support, the agency said.

Since the beginning of the year, Moody's said it had been concerned about the banks' continued tight liquidity positions, particularly in foreign-currency, against the back-drop of worsening global liquidity conditions.

The agency said, though, that is not changing bank ratings. But the government's actions do underpin Moody's belief that systemic support in Korea is very high.

Meanwhile, the outlook for the bank financial strength rating for six out of 14 rated banks remains negative. The weighted average bank financial strength rating for the sector is C-, the agency said.

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