Greece had already received non-investment grades by credit rating agencies before the most recent downgrade in its sovereign rating by S&P. So large institutional investors had not been able to invest in Greece anyway.

Bank of Korea Governor Kim Choong-soo, right, holds a meeting with chief executives at the BOK’s headquarters in central Seoul yesterday. Korea’s central bank governor cautioned companies, individuals and the government yesterday on the danger of taking on an unreasonable level of debt. During a meeting with corporate executives yesterday, Bank of Korea Governor Kim Choong-so said, “corporations, the government and individuals should pay close attention to how much debt they take on.” The BOK’s 25 basis point rate hike last Friday will increase interest payments for debt holders. Kim also commented on Korea’s mounting household debt. “We should keep an eye on those who take out loans that have no ability to pay them back.” Yet he expressed confidence that Korea’s record household debt – which recently exceeded the 800 trillion won mark – is manageable. A number of the country’s largest conglomerates were represented at the meeting, including Kim Young-chul, Dongkuk Steel president & CEO; Alfred S. Koh, Samsung SDS CEO; Huh Chang-soo, GS Engineering & Construction chairman; Huh Myung-soo, GS E&C president & CEO; and Yoon Young-doo, Asiana Airlines chief executive. “The housing market doesn’t look so optimistic,” said GS E&C’s chairman, blaming it on financial authorities’ tight management of project financing loans, causing builders to suffer from unsold apartments. Regarding the airline industry’s outlook, Asiana Airlines Chief Executive Yoon said: “The industry was sluggish in March and April due to Japan’s massive earthquake, but after hitting bottom in April, the number of visitors to Japan is on the rise. And since oil prices have stabilized, the industry is likely to do fine in the third and fourth quarter when demand peaks.” Meanwhile, S&P’s downgrade of Greece’s credit rating to the lowest possible level did not negatively affect the local stock market. The Kospi rose by nearly 30 points on relief over China’s inflation data. “The local market was buoyed by relief over the index that had been giving fears the most to the market,” said SK Securities analyst Kim Young-jun. He added that S&P’s credit rating downgrade of Greece did not negatively affect the local market as much since, “Greece had already received non-investment grades by credit rating agencies before the most recent downgrade in its sovereign rating by S&P. So large institutional investors had not been able to invest in Greece anyway.”