SEOUL, SOUTH KOREA - South Korea moved to shore up its banks yesterday, adding to global efforts to tackle the financial crisis.

The government announced a US$130-billion (S$192-billion) finance package, including a guarantee for the offshore debt of domestic banks, aimed at maintaining stability and keeping Asia's fourth-largest economy away from recession.

The announcement came hours after United States and European leaders said they will hold a series of summits to address the crisis, starting soon after next month's US presidential election.

Said South Korean Prime Minister Han Seung Soo: 'We have to do our best to tide over the financial crisis and stop an economic slump.'

His government offered up to US$100 billion in guarantees for bank borrowings in foreign currencies, and a US$30-billion injection into the banking system.

Despite foreign reserves of almost US$240 billion, South Korea was seen as vulnerable to the current turmoil because of a surge in short-term foreign borrowing by its banks in the past year as US interest rates fell.