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Article: Moribond; South Korean corporate finance; South Korea's corporate-bond market.(Finance and Economics)
- Article from:
- The Economist (US)
- Article date:
- December 16, 2000
CopyrightCOPYRIGHT 2000 Economist Newspaper Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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ON DECEMBER 8th, the South Korean government decided to do something about the country's desperately dilapidated corporate-bond market. The Ministry of Finance ordered banks to lend to companies that are unable to issue bonds, and then themselves to issue bonds backed by the loans. In the absence of any likely buyers for the banks' paper, the government is also asking them to set up a special fund for the sole purpose of buying their own bonds.
It is a tall order. The country's banks are in no mood to buy bonds that nobody else wants. The state is already forcing them to roll over loans that they granted to 235 firms which narrowly avoided liquidation last month, ...