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QE tapering feared to hit Korean brokerage houses, card firms

Korean brokerage houses and card companies are feared to face worsening profitability as the Federal Reserve's possible tapering of monetary stimulus will jack up borrowing costs, the top central banker said Monday.

Bank of Korea (BOK) Gov. Kim Choong-soo said that an internal stress test showed that rises in market rates, triggered by the tapering of the Fed's quantitative easing (QE), is not likely to pose a threat to financial stability, but local securities companies and card firms are feared to see their profitability fall.

His remarks came in a meeting with heads of non-bank institutions.

Uncertainty has risen over when the Fed will begin to scale back its $85 billion in bond purchases, but talks over QE tapering have raised bond yields globally. (Yonhap News)

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