China in auto power play
It might not shake up the industry just yet, but China's interest in Volvo and Saab is the start of something big in global autos, writes columnist Wei Gu. Commentary
South Korea firms' exposure to Lehman/Merrill $1.4 billion
SEOUL (Reuters) - South Korean financial institutions had exposure of a combined $1.44 billion to Lehman Brothers and Merrill Lynch as of June 30, the country's top financial regulatory agency said on Monday.
The U.S. financial system faces an unprecedented shakeup with Lehman filing for bankruptcy protection, Bank of America buying Merrill and the Federal Reserve saying for the first time it will accept stocks in exchange for cash loans.
The Financial Services Commission (FSC) said in a statement that local banks, insurers and brokerages had invested $720 million in Lehman.
Local financial companies are expected to deal with possible losses from the exposure to Lehman as domestic banks posted a combined $13.4 billion in net profits as of the end of 2007, the FSC said.
The regulatory agency said it planned to take measures to protect local investors from Lehman such as inspecting assets of Lehman's Seoul branch.
The FSC said South Korean financial firms' Merrill exposure was also $720 million and potential losses from the exposure would be limited as Bank of America would assume Merrill's debts.
It also said domestic financial firms would not have problems securing foreign currency liquidity even in the worst case.
The country will pump up foreign currency liquidity if international financial markets deteriorate further.
South Korea's government, central bank and financial regulatory agency will meet early on Tuesday to discuss the impact from the turmoil in the U.S. financial system.
The country's financial markets were closed on Monday for the Chuseok holiday and will resume trading on Tuesday.
(Reporting by Cheon Jong-woo; Editing by Keiron Henderson)
