SEOUL, March 21 (Xinhua) -- The Bank of Korea (BOK), South Korea's central bank, said Thursday that it will provide custody service for global central banks and governments when they invest in local bonds.
Foreign central banks, governments and international finance organizations will be subject to custody service offered by the BOK when they invest in Korea Treasury Bond and monetary stabilization bonds issued by the finance ministry and the central bank.
"The BOK's service will reduce custody risks related to bond investment by global central banks," the central bank said in a report on payment and settlement. "In addition, it will contribute to financial stability to a great extent by strengthening the monitoring of fund flows in and out of the country."
Custody service is a service provided by custodian banks, which hold securities such as stocks and bonds, arrange settlement and collect interests and dividends from securities on behalf of customers.
Central banks in the U.S., Britain, Japan and Australia are also providing custody services for foreign central banks, according to the report.
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