HONG KONG (Standard&Poor's) Oct. 7, 2008--Pressure from the global liquidity squeeze threatens to negatively affect the credit quality of Korean banks, mainly due to their ongoing foreign currency funding needs, Standard&Poor's Ratings Services said today. Korean banks' foreign currency funding had more than doubled to $127 billion as of the end of June 2008 since the end of 2005. Korean banks are facing increasing difficulty refinancing maturing borrowings, with the cost of borrowing rising even as maturities shorten. The government of Korea (A/Stable/A-1), regarded as interventionist by Standard&Poor's, has said repeatedly in recent weeks that it will inject foreign currency into the Korean banking system, in part to minimize the negative impact on the
