[Korea and U.S. bankers]
Angela --
I don't know who comprises the chaebol, but, like you, I'm curious. I'll try to watch for comments as I read other sources. From the Economist article, it appears Kim is the right man for the job, at least in that he seems positioned to take on the chaebol and support the IMF in following their guidelines. Of course, it's early in the game.
From this evening's late-breaking news, a report on the bankers' meeting in NY today:
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Reuters Story - January 05, 1998 19:32
By George Lerner
NEW YORK, Jan. 5 (Reuters) - South Korean officials and
U.S. bankers took a small step toward solving the Asian
nation's financial crisis Monday, holding their first
face-to-face meeting on refinancing $40 billion in short-term
debt.
"It was a meeting of minds as to where the government is
going," one banker who attended Monday's gathering said. "The
Koreans are looking for ideas."
While no agreements were reached, South Korean presidential
adviser In Yong Chung called the meeting "positive" and said he
and the bankers discussed several options.
Chung, who met with U.S. Deputy Treasury Secretary Lawrence
Summers Monday evening, said his country had been presented a
"menu of options" to restructure its obligations. But he added
that Seoul needed time to study the various alternatives.
Analysts and banking sources said they did not expect South
Korea to decide on a refinancing plan until after
President-elect Kim Dae-jung takes office Feb. 15.
Sources said Monday's talks, which took place at J.P.
Morgan headquarters, were general, not specific.
U.S. bankers, many of whom participated in Latin America's
debt refinancing in the 1980s, said the first day of talks gave
them a better grasp of Korea's problem. Korean delegates said
their government would need more time to select a rescue plan.
One banker familiar with the talks said he expects Korea
ultimately to refinance its short-term debt with a plan similar
to a J.P. Morgan proposal currently on the table. That plan
would involve the Korean government issuing as much as $20
billion in debt, half of which would be go toward short-term
debt of its ailing banks.
"It was the very first time the lender side and the Korean
side have met face to face," Chung said. "It's too early to say
(which plan the government will choose)."
Korea is looking for ways to rebuild confidence in its
battered economy, where a string of corporate and banking
failures set off a run on the country's currency and stock
market, and raised questions about how troubled companies could
refinance themselves.
"The details cannot be worked out in one meeting," said E.
Han Kim, finance professor at University of Michigan, who also
attended the talks. "This is not an insolvency situation, this
is a liquidity situation."
U.S. bankers, who came together late last month at the
behest of the Federal Reserve Bank of New York, fashioned an
accord to roll over the country's debt due at the end of last
year, but were still working out the details of a massive debt
restructuring.
"What has had to be addressed urgently is maintaining the
lifeblood of the economy -- the short-terms, credit lines, the
trade lines (of credit) -- and that's being addressed," said a
banker who participated in Monday's session.
The meeting did not tackle ways of extending Korea's
stockpile of short-term debt. Participants left the problem for
later talks.
"It's going to be under discussion as we move to meetings
later in the week," one banker said.
U.S. banks have been weighing the J.P. Morgan plan, which
would involve up to $20 billion debt in new Korean debt, as
well as an earlier proposal for a $9 billion global bond issue
from Goldman Sachs and Salomon Smith Barney, advisers to the
Korean government.
"My sense is that we'll end up with something more like the
Morgan plan," said one banker familiar with the talks.
Japanese media reported that 10 major Japanese banks agreed
Monday to roll over South Korea's debts coming due in January
to help ease South Korea's acute shortage of foreign currency.
Before Monday's meeting, European and U.S. banks had agreed
to extend for one month Korean debt that matured at the end of
December. The extension enabled global banks to give the
financial community time to figure out the details of its
obligations to Korea and to prevent global banks from upsetting
their balance sheets at year-end, according to a source close
to the Federal Reserve.>>> |
