Seoul  - South Korean President Lee Myung Bak proposed a three-nation financial summit this month with Japan and China to try to limit the effects of the global financial crisis, a ruling party spokesman said Monday.

Lee would like the meeting to take place at the Asia-Europe Summit, which is to be held October 24-25 in Beijing, the Grand National Party spokesman said after talks with Lee and party chairman Park Hee Tae in Seoul.

Lee said the three neighbours working together could deal with the crisis because East Asia is the largest holder of currency reserves in the world.

Lee, who took office in February, had already proposed a meeting last week of the finance ministers of Asia's three largest economies as the global financial crisis has an increasingly tougher impact on South Korea's economy.

Asia is the "economic growth engine of the world" but the financial crisis that erupted in the United States poses a danger to the entire world economy, he said.

South Korean Finance Minister Kang Man Soo called on his country's banks to sell overseas assets to guard against a threatening shortage of spending capital.

The government wants to do its part to make sure credit continues to flow but the financial institutions must also do their part, he was quoted as saying by the national news agency Yonhap after a meeting with bank chiefs in Seoul.

Among the measures he proposed was the sale of bonds and the transfer of foreign exchange holdings in other countries back to South Korea.

The government and central bank were also in agreement that South Korea's foreign currency reserves should be used to support the won, Kang said.

The won fell Monday against the US dollar to a six-year low amid fears that domestic banks and companies would suffer funding shortages because of the global financial crisis.

The crisis was sparked by losses related to US subprime mortgages. It has caused investment banks and lenders to fail and credit to dry up as financial institutions hold onto their funds as they try to gauge the impact of the crisis.

The won traded at 1,269 to the dollar at the end of the trading day after 1,223.50 Thursday. Markets were closed Friday for a holiday. (dpa)