[THE INVESTOR]  South Korea’s top financial regulator on Sept. 9 said it will review contingency plans in place for possible market turmoil caused by North Korea’s provocation.

The Financial Services Commission convened an emergency meeting of senior officials to discuss the aftermath of the communist neighbor’s fifth nuclear test earlier in the day.

In the session, presided over by the FSC’s chief Yim Jong-yong, the commission concluded that the local financial market has suffered no big impact from Pyongyang’s latest provocation.

“Big changes in the stock prices and foreign exchange rate today rather appear more affected by a sense of disappointment over the European Central Bank’s freeze of interest rates and profit-taking,” it said.

The agency pointed out that Seoul’s financial market has traditionally been little affected by the North’s provocations, or has recovered quickly when affected.

“But now that the intensity of North Korea‘s threats of provocation is constantly getting higher and the situations are still uncertain, there is a possibility that the impact on the financial market won’t be short-lived,” it added. “We will closely monitor related trends. We will also review existing contingency plans in case of a shift in the situation.”

In a separate statement, the Financial Supervisory Service also said it will step up monitoring the market in “emergency response” mode to cope with “potential elements for instability” stemming from Pyongyang‘s nuclear experiment.

It voiced optimism about South Korea’s capability to handle an external impact at least for a few months if it’s not worse than the 2008-09 financial crisis.

(theinvestor@heraldcorp.com)