President Lee Myung-bak called Monday for greater international cooperation to minimize the impact that the cut in the U.S. credit rating could have on the South Korean economy, his office said.

   "We are in a situation that any single nation cannot independently cope with. This is a survival game of all the countries in the world," Lee said during an emergency meeting convened to assess the repercussions of the U.S. credit rating downgrade, according to presidential spokesman Park Jeong-ha.

   "International cooperation is more important than anything else," Lee was quoted by the spokesman as saying.

Attending the meeting were the finance minister, the central bank chief and other finance officials as well as civilian experts. During a weekly meeting with senior presidential aides, Lee also instructed officials to work out ways to effectively cope with the possible repercussions of the U.S. rating cut.

   "We have to keep a close eye on how the situation unfolds," Lee told the meeting, instructing officials to meet more often to monitor the situation and take necessary steps without delay, according to the spokesman.

   Lee also suggested that South Korean financial institutions think about diversifying borrowing sources to include more of Middle Eastern loans, saying they rely too much on European and U.S. sources.

   "Considering the trend in the financial market, money converges in the Middle East," the spokesman quoted Lee as saying. "As financial institutions of our country rely greatly on Europe and the U.S., we'd better think about increasing cooperation with the Middle East in the future."

   Officials from the presidential office and the ruling party also held a policy meeting to discuss the situation.

   Rep. Lee Ju-young, the chief policymaker of the Grand National Party, told reporters later that the party asked the government to handle the situation wisely so as not to unnerve the people, and the government promised to "mobilize every possible policy measure if necessary."

   Global credit rating agency Standard and Poor's downgraded its U.S. credit rating to AA+ from AAA on Friday. The downgrade raised concern that it could lead to liquidity problems at South Korean banks.

   But the country's top financial regulator, Financial Services Commission Gov. Kwon Hyouk-se, stressed that South Korean banks have no problems with their foreign currency liquidity conditions as their foreign currency liquidity has greatly improved from the past.

Source: Yonhap News (August 9, 2011)