South Korea’s top financial markets regulator on Monday said that state-run Korean Development Bank (KDB) should think carefully about buying a stake in Lehman Brothers given the state of international markets, in an indication that the government would not support a potential deal.

KDB said last week that it was in talks about a possible investment in Lehman, the beleaguered US investment bank that is under pressure to raise more capital before it reports its earnings later this month.