Exclusive: South Korea asks banks to prepare $4 bln to support credit union -sources

An official at the Financial Services Commission said it could not confirm the amount or other details, but it had asked the banks for cooperation in preparing liquidity through repurchase-agreement facilities to aid MG Community Credit Cooperatives .

South Korea's top financial authorities pledged on Sunday to ensure liquidity at the credit cooperative, which has nearly 1,300 branches, saying in a statement that MGCCC's capital ratio and liquidity far exceeded regulatory ratios and it had sufficient cash-equivalent assets. Woori Bank, Hana Bank, Shinhan Bank, KB Kookmin Bank and NongHyup Bank had been asked to make financing available to MGCCC, although the actual amount extended to the credit union would depend on deposit withdrawals, the sources said.

An investor note from Citi last week played down the risks from the incident but warned of negative effects on economic growth from the indebted real estate sector.

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