Moody's and Korea In­vestors Ser­vice hold 10th an­nual con­fer­ence

The Pak Banker - - Front Page -


Global rat­ing agency Moody's and its Korean af­fil­i­ate, Korea In­vestors Ser­vice (KIS), held their tenth an­nual con­fer­ence in Seoul to­day.

The fo­cus of this year's con­fer­ence was the global out­look and cur­rent credit is­sues fac­ing Korea's is­suers.

"The global econ­omy is grad­u­ally re­cov­er­ing, but risks are to the down­side. Asia Pa­cific eco­nomic and fis­cal fun­da­men­tals will re­main rel­a­tively strong, and rat­ings mo­men­tum has been gen­er­ally on the up­side," says Tom Byrne, a Moody's Se­nior Vice Pres­i­dent and Re­gional Credit Of­fi­cer, who kicked off the con­fer­ence with the global, Asia Pa­cific and Korean sov­er­eign out­looks.

"Korea demon­strates strong fis­cal fun­da­men­tals which will en­able a rel­a­tively large de­gree of pol­icy space to cope with the con­tin­gent do­mes­tic risks and ex­ter­nal shocks," says Byrne.

"Its rat­ings out­look hinges on con­tain­ing the banks' fund­ing vul­ner­a­bil­ity and con­tin­gent fis­cal li­a­bil­i­ties, while main­tain- ing rel­a­tively strong eco­nomic growth" he adds.

Graeme Knowd, a Moody's As­so­ciate Manag­ing Di­rec­tor, spoke next on the global bank­ing out­look.

"Gov­ern­ment sup­port has long ob­scured the bank­ing sec­tor's fun­da­men­tal risk­i­ness, and the many spec­tac­u­lar fail­ures of re­cent years make it im­pos­si­ble to ig­nore these risks any longer," says Knowd.

"Sup­port is now less cer­tain, as the will­ing­ness of gov­ern­ments has been re­duced by po­lit­i­cal back­lash and their abil­i­ties con­strained by fis­cal pres­sures," he adds.

On the Korean bank­ing sec­tor, Youngil Choi, a Moody's Vice Pres­i­dent and Se­nior Credit Of­fi­cer, says, "The out­look for Korea's bank­ing sys­tem re­mains sta­ble with in­creas­ing tail risks that could arise as a re­sult of con­ta­gion from the euro area and knock-on ef­fects from China. "We ex­pect the over­all oper­at­ing en­vi­ron­ment to weaken over the next 4-6 quar­ters, sim­i­lar to the sit­u­a­tion for many bank­ing sys­tems in Asia Pa­cific.

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