S. Korea Must Control Volatile Capital Flows: BOK’s Kim

South Korea must control volatile capital flows as quantitative easing measures taken in the U.S. and Europe have a “negative spillover” into emerging countries, Bank of Korea Governor Kim Choong Soo said.

“It seems current safeguards against volatile capital flows are working to some extent,” Kim told reporters in Incheon, west of Seoul, on Sept. 14. The comments were embargoed for release today.

The U.S. Federal Reserve on Sept. 13 announced a third round of quantitative easing as it seeks to boost growth and reduce unemployment. The measures may spark a new round of protectionism in Latin America, Banco Bilbao Vizcaya Argentaria SA said in a Sept. 14 research note.

Europe’s problems need a global solution with more active participation from emerging economies, Kim said. Emerging countries need to boost domestic demand to spur growth and help support the global economy, he said.

The Fed said it would buy $40 billion of mortgage-backed securities a month to stimulate the U.S. economy.

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