Seoul to take preemptive actions if needed to stabilize markets

SEOUL, Aug. 20 (Yonhap) -- The financial authorities will take "preemptive and stern" actions to stabilize markets if volatility increases, with a lengthy trade war between Washington and Beijing fueling fears of a global recession, a senior government official said Tuesday.

Vice Finance Minister Kim Yong-beom told a meeting with economy-related senior officials that the government is closely monitoring the nation's foreign exchange market and will take actions if excessive herd behaviors undermine the market's stability.

"Recently, a tail risk of global financial markets is increasing," Kim said, referring to a form of portfolio risk that depicts times when bigger shocks than normal happen.

"The government will take preemptive and stern actions to stabilize markets if market anxiety occurs," Kim said.

The government has drawn up with contingency plans to cope with market volatility, Kim said.

The measures included easing stock buyback rules and tightening short-selling regulations, Kim said.

South Korea banned stock short-selling in October 2008 amid a global financial crisis. The ban on short-selling of financial stocks was lifted in November 2013.

kdh@yna.co.kr
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