South Korea is stepping up monitoring of its financial market and preparing emergency stability policies as the country braces for the U.S. Federal Reserve\'s likely stimulus tapering, the government said Sunday. Concerns are rising that the Fed\'s soon-to-come stimulus tapering may lead to foreign capital flights from emerging nations. Many market players are betting that the Fed will decide to begin tapering its bond-buying stimulus program at its policy meeting slated for Sept. 17-18. South Korea is seen to be among the emerging markets that would sustain the capital-flight impacts, despite its relatively solid economic fundamentals, including its current account surplus and the accumulated foreign reserves. As part of efforts to counter the potential instability, the government has recently decided to step up defense of its financial market upon an assumption that the Fed may agree to start tapering its US$85 billion stimulus program in order to scale down money circulation, according to several financial agencies, including the Bank of Korea, the Ministry of Strategy and Finance, and the Financial Services Commission. \"The Fed\'s stimulus tapering does not pose a substantial threat as it used to because it has long been predicted,\" deputy finance minister Choo Kyung-ho said. \"Still, the global financial market will somehow sustain impacts from it, and we are preparing for all possibilities.\" Finance ministry officials said the local financial market is now under tighter-than-usual monitoring. The ministry will also hold a meeting to examine the financial market on Sept. 22, the last day of the five-day Chuseok holiday season, one of South Korea\'s major holidays, according to the officials. The government is also planning to use emergency countermeasures in the event of heavy capital flights following the expected Fed decision, the officials said, referring to bank levies on foreign debts, restrictions on banks\' foreign exchange forward trading and reinstating taxation on foreigners\' local bond investments, according to the officials. The Bank of Korea is also studying ways to prop up foreign currency liquidity of local banks, including a plan to buy up export bills from local banks, as part of efforts to minimize fallouts from the Fed tapering. Financial agencies will also beef up their monitoring of the financial health among local financial institutions in order to examine whether they are well prepared for short-term foreign capital flights, the officials also said.