Handful of Japan banks expected to roll over Korea loans
Tatsuo Ito
TOKYO, Dec 29: Some Japanese banks are likely to agree to roll over their short-term credits to South Korea, banking sources here said on Monday.South Korea and Japan's finance ministry had strongly urged the banks to agree to a rollover to avoid sparking a new financial crisis in the world's eleventh largest economy. The sources said that a group of 10 Japanese banks met in Tokyo on Monday morning to discuss the situation in South Korea, including Japanese banks' stance towards the nation. At the meeting, a few major Japanese banks expressed their willingness to roll over their credits to South Korea, they said. The sources said it was undecided whether the rest of the banks would follow suit. Such a rollover is crucial for South Korea to avoid a renewed liquidity crisis. Without access to such credits, it would be highly difficult for Korean banks to operate. The sources declined to identify which Japanese banks decided to take positive steps towards the rollovers. One Japanese bank official
said Japanese banks' short-term credits would be needed to be guaranteed by the Bank of Korea when they are converted to medium to long-term credits, in return for accepting a call for rolling over their credits. Major banks from Japan, the United States and Europe are expected to meet later on Monday in New York to discuss financial support for South Korea.Bank of Tokyo-Mitsubishi Ltd is expected to attend the meeting in New York as the representative of Japanese banks, the sources said. A spokesman at Bank of Tokyo-Mitsubishi said one of its executives would attend the meeting in New York but declined to comment on any other details. Vice finance minister for international affairs Eisuke Sakakibara said on Sunday on a television programme that the bankers are likely to discuss how to encourage banks to lend more to South Korea and to roll over existing loans. The Wall Street Journal reported in its Monday editions that major US lenders have agreed in principle to roll over some of their loans. It
said the New York talks would address the possibility of large new loans to South Korea. Japan and other major industrialised nations have already agreed to provide funds to South Korea as part of an IMF rescue package.
Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.
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