Korean gov`t braces for another global financial crisis

The Korean government has begun emergency mode in four years after the collapse of U.S. investment bank Lehman Brothers to brace for another global financial crisis.

While chairing a Cabinet meeting at the presidential office, President Lee Myung-bak warned of the severity of the latest economic crisis, saying, “We should not take the current situation lightly.”

“They said our economy would decline in the first half and grow in the latter half this year, but the economy will likely weaken in the latter half,” he said, adding, “The economy team should make thorough preparations for this possibility.”

Shortly after the meeting, Strategy and Finance Minister Bahk Jae-wan convened a meeting to review the real economy and financial market at the government complex in the southern Seoul suburb of Gwacheon, Gyeonggi Province. “(The Korean economy) has enough defense systems and strong fundamentals, but we will turn the regular review system into one using intensive monitoring.”

Bank of Korea Deputy Gov. Park Won-sik also presided over an emergency meeting on monetary and financial policies to check global market conditions and strengthen cooperation with central banks in major economies in the event of emergencies.

Cooperation between the government and politicians also showed signs of beginning. Ruling Saenuri Party lawmakers who serve on the parliamentary policy committee will have their first meeting with officials from the Finance Ministry on economic matters.

Committee vice chairman Nah Sung-rin hinted at discussion on the formulation of a supplementary budget by saying, “We will make a multi-faceted on if additional stimulus measures for the financial and fiscal sectors are necessary.”

Finance ministers of G-7 and G-20 countries also discussed the same day how to overcome the European financial crisis through video conferences.

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