Banks pledge to extend loan repayment period for Seoul

A total of 10 banks pledged to make efforts Friday to secure foreign currency liquidity in South Korea, banking sources said.

They had been asked by South Korea's central bank to extend the repayment periods of their loans to South Korean financial institutions, the sources said. Some banks had remained reluctant to do so, pointing out their own domestic problems.

Many Japanese banks are struggling to squeeze assets to deal with stricter banking supervision codes based on capital-to-asset ratios. The request was made by Bank of Korea Gov. Lee Kyung Shick earlier in the day during separate meetings with Bank of Japan Gov. Yasuo Matsushita and top executives of several Japanese commercial banks, including Sakura Bank and the Industrial Bank of Japan, the sources said.

During the meetings, Lee discussed the South Korean financial crisis with Matsushita and the executives, and asked that private financial institutions in his country be allowed an extension on the repayment period for loans from Japanese banks, the sources said.