Bank of Korea to boost emergency liquidity over bank run fears

Central bank will lower rate and accept more collateral amid scare over credit union’s deposits

Bank of Korea, Seoul
The Bank of Korea

South Korea’s central bank said today (July 27) it will change rules for a liquidity facility for troubled lenders, in a bid to prevent large-scale bank runs.

The Bank of Korea’s monetary policy committee decided to reform its standing lending facility, which was set up to supply emergency liquidity to lenders. Its move came after a credit union was hit by customer withdrawals in early July, prompting regulators to ask banks to prepare a bailout.

The BoK said the new measure would take effect

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