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찰스 킨들버거와 로버트 알리버는 <광기 패닉 붕괴>에서

"금융위기는 끝없이 피어 오르는 질긴 다년생화"라고 말했다.

Asian Nations to Boost Sales of Local Bonds, ADB Says (Update1) ...

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Korean Won Falls a Sixth Day on Economic Slump; Bonds Advance Nov. ...

Money Rates Advance as Banks Reluctant to Lend Amid Recession Nov. ...

Obama Will Likely Delay Overhaul of Nafta to Focus on Economy Nov. ...

By Belinda Cao

Nov. 17 (Bloomberg) -- China may increase its currency-swap agreement with South Korea fivefold to $20 billion, said Cheng Siwei, former vice chairman of the nation's legislature.

The two countries joined Japan in a statement Nov. 15 in Washington to say they agreed to enhance economic cooperation and boost bilateral currency swaps as protection against the global financial crisis. China has the world's biggest foreign- exchange reserves, with $1.9 trillion in assets.

``The talks, if realized, should be a big support to Korea and help stabilize China's neighboring markets,'' said Shi Lei, an analyst with Bank of China Ltd. in Beijing. The measure ``will also protect the Asian economies from further shocks from the global financial crisis.''

South Korea is boosting spending and pumping money into the banking system to limit the damage from the crisis, which contributed to the won's 33 percent slide this year. Asia's fourth-biggest economy already has a currency-swap agreement of $4 billion with China and $13 billion with Japan. Leaders of the three nations are scheduled to meet Dec. 14 in Fukuoka, Japan.

Cheng called for regional talks on arrangements similar to the International Monetary Fund's special drawing rights, or SDR, a pool of the world's major currencies used to enhance liquidity in global markets.

``Proposals for a single Asian currency, similar to the euro, will take very long to be realized due to the vast differences between Asian countries,'' said Cheng, former vice chairman of the standing committee of the National People's Congress in a speech late yesterday at a financial forum in Beijing. ``Something like the SDR may work first.''

Finance ministers from 13 Asian nations, including South Korea, Japan and China, agreed in May to create a pool of at least $80 billion in foreign-exchange reserves to be tapped to protect their currencies. That was an expansion of the so-called Chiang Mai Initiative, a deal that allows countries to lend each other money at favorable terms should they need to support their exchange rates.

To contact the reporter on this story: Belinda Cao in Beijing at lcao4@bloomberg.net

Last Updated: November 16, 2008 22:49 EST

Money Market Rates Fall in Asia as Central Bank Cuts Expected

By Patricia Lui and Candice Zachariahs

Nov. 17 (Bloomberg) -- Asian money rates declined, with Australian funding costs dropping to the cheapest since before Lehman Brothers Holdings Inc. collapsed, amid expectations central banks will extend reductions in interest rates.

The Hong Kong interbank offered rate, or Hibor, for three- month loans fell four basis points to 2.15 percent, its first decline in three days. The difference between the rate Australian banks charge each other for three-month loans and the overnight indexed swap rate shrank to 32 basis points at 3:09 p.m. in Sydney, the narrowest since Sept. 4, from 42 basis points on Nov. 14. The measure of funding availability averaged 11 basis points in the five years before the credit crisis started in July 2007.

``It's an indication that the stresses are easing, but not that they're done,'' said Matthew Johnson, an economist at UBS AG in Sydney. ``There's still a lot of uncertainty about just what will be confessed when it comes to the end of the year book closing, particularly by U.S. banks.''

Interbank lending rates jumped as banks hoarded cash after Lehman Brothers went bankrupt on Sept. 15. Costs have eased in the past month as governments announced deposit and lending guarantees and central banks offered unlimited U.S. dollars to financial institutions.

South Korea's one-year rate to swap won loans for dollars rose for a second day to 0.3 percent, indicating banks are less desperate for dollars. The measure averaged 3.3 percent this year before Lehman's demise. The country's benchmark 91-day certificate of deposit rate declined three basis points, or 0.03 percentage point to 5.53 percent, the lowest since July 16.

Central Banks

The Reserve Bank of Australia added A$1.68 billion ($1.07 billion) to money markets today after estimating there would be a deficit of A$2 billion. Australian banks reduced deposits held at the RBA by A$268 million to A$4.47 billion on Nov. 14, the central bank said today on its Web site.

``Central banks have taken a lot of steps to inject liquidity and ease strains in the money markets and they're all helping,'' said Johnson. ``It's definitely not the death of the risk premium.''

Governments have offered trillions of dollars in bailouts, assistance for banks and deposit guarantees to ease the crisis. The U.S. Treasury last month announced a $700 billion Troubled Asset Relief Program to bolster banks' balance sheets.

`Pain Killers'

``The good thing about the TARP was that it brought Libor down,'' said David Carbon, head of economic and currency research at DBS Group Holdings in Singapore, Southeast Asia's largest bank. ``But the thing is, it is as if they just injected a whole lot of morphine into the patient because they can't do anything about him till January when they have a new administration. So for now, they're just feeding him as much pain killer as they can.''

The London interbank offered rate, or Libor, that banks say they charge each other for three-month loans in dollars, rose for a second day on Nov. 14 after falling for 23 days. The rate increased 9 basis points to 2.24 percent on Nov. 14, according to British Bankers' Association data.

Money market rates rose in London last week after Europe sank into its first recession in 15 years, stoking concern world leaders will struggle to fix a financial crisis that's paralyzing lending by banks.

The Singapore interbank rate for three-month U.S. dollar loans advanced five basis points to 2.28 percent, rising for a second day. A basis point is 0.01 percentage point.

The Libor-OIS spread, a gauge of cash scarcity among banks, widened 7 basis points to 167 basis points on Nov. 14. The difference compares with 87 basis points on the last trading day before Lehman declared bankruptcy, and an average of 11 basis points in the five years before the onset of the financial crisis.

The TED spread, which measures the difference bet

ween what the U.S. government and banks pay for three-month loans, widened 6 basis points to 203 basis points.

To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.netPatricia Lui at plui4@bloomberg.net

Last Updated: November 17, 2008 01:06 EST

Korean Won Falls to 3-Week Low on Economic Concerns; Bonds Gain

By Kim Kyoungwha

Nov. 17 (Bloomberg) -- South Korea's won fell to the lowest in almost three weeks after a government report indicated consumer spending is weakening, fanning concern that growth will slow in Asia's fourth-largest economy. Bonds rose.

The currency and the Kospi stock index both dropped for a fifth day as overseas investors sold more Korean shares than they bought. The International Monetary Fund may cut its 2009 economic growth forecast for the nation to less than 3 percent from 3.5 percent, Yonhap News reported today, citing President Lee Myung Bak.

``The won will find it difficult to stage a meaningful turnaround given that the economy is cooling fast,'' said Chun Chong Woo, an economist at Standard Chartered First Bank Korea Ltd. in Seoul. ``Risk aversion is still prevalent, damping demand for emerging-market assets.''

The won fell 0.7 percent to 1,409 per dollar at the 3 p.m. close in Seoul, according to Seoul Money Brokerage Services Ltd. The currency dropped 34 percent so far this year, the biggest loss among the 10 most-traded Asian currencies outside of Japan.

Sales at the country's three biggest discount chains declined 0.7 percent from a year earlier last month, after tumbling 9.2 percent in September, the Ministry of Knowledge Economy said in Gwacheon today. Department store sales were unchanged, following a 0.3 percent drop.

Bonds Decline

Bonds advanced on speculation yields near the highest since Oct. 8 attracted investors to government debt along with deepening concern that the economy may shrink.

The benchmark three-year yield jumped 67 basis points, or 0.67 percentage point, last week on concern that the government will step up bond sales to fund its economic stimulus plan and after the finance ministry said it would set up a stabilization fund intended to buy corporate and bank debt.

``There's a perception that last week's surge in yields was overdone,'' said Kong Dong Rak, a fixed-income strategist with Hana Daetwo Securities Co. in Seoul. ``With no strong incentives, the market is having a mild recovery.''

The yield on the benchmark 5.5 percent bond due June 2011 fell to 5.36 percent, from 5.40 percent at the end of last week, according to Korea Securities Dealers Association.

The government sold a less-than-planned 311 billion won ($220 million) of 10-year bonds at an average yield of 6.02 percent, the Ministry of Strategy and Finance said. Investors submitted total bids of 361 billion won, or 72 percent of the 500 billion won of debt offered, the ministry said.

To contact the reporters on this story: Kim Kyoungwha in Beijing at kkim19@bloomberg.net.

Last Updated: November 17, 2008 01:31 EST

그리고도 많다.

South Korea Stuck in `Intensive-Care,' Swaps Show: Chart of Day

By Kim Kyoungwha

Nov. 14 (Bloomberg) --

South Korea's financial medicine isn't working, as banks are starved of dollars even after government stimulus plans and the provision of $30 billion from the Federal Reserve, cross-currency swaps show.

The CHART OF THE DAY shows the one-year rate to swap won loans for dollars plunged to a record minus 0.4 percent, only the 11th time below zero this decade. The rate, a gauge of the availability of dollar funding, averaged 3.3 percent this year before Lehman Brothers Holdings Inc. collapsed.

``The market's still in the intensive-care unit after a good dose of measures made its heart beat again,'' said Choi Seok Won, Seoul-based head of fixed income research with Samsung Securities Co., South Korea's biggest brokerage. ``The swap market's drop is a reflection of concern that the money isn't enough to help ensure smooth rollovers of debt.''

South Korean policy makers yesterday said they will provide an additional $16 billion to help exporters, after slashing interest rates at an unprecedented pace and announcing an $11 billion spending plan in the past month. Fitch Ratings lowered its credit ratings outlook for the country this week to negative from stable, citing concern currency reserves may drop during the biggest crisis since the nation needed an International Monetary Fund bailout in 1997.

In a cross-currency swap, investors pay or receive a variable interest rate in one currency in exchange for a fixed rate in another currency. In Korea, local banks typically pay a fixed rate in won in exchange for a floating rate in dollars.

To contact the reporters on this story: Kim Kyoungwha in Beijing at kkim19@bloomberg.net;

Last Updated: November 13, 2008 20:17 EST

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Korean Air Has Biggest Loss in 10 Years on Fuel, Won

Nov. 13 (Bloomberg) --

Woori Finance Holdings Co. led declines in South Korean bank stocks after the financial regulator rejected speculation the government would set up a fund to help lenders raise capital.

The Maeil Business Newspaper reported today that the government planned a fund of at least 10 trillion won ($7.2 billion) to buy subordinated bonds and redeemable preferred shares from banks in a move to inject capital. Rhee Chang Yong, vice chairman of the Financial Services Commission, said in a telephone interview that while setting up a fund may be ``theoretically possible,'' it isn't on the agenda.

Governments in the U.S. and Europe have taken stakes in financial firms to help them survive the worst financial crisis since the Great Depression. South Korea, which already holds stakes in banks including Woori, last month pledged to guarantee $100 billion in bank debts and supply lenders with $30 billion in dollars to stabilize its financial markets.

``Investors seem to think that Korean banks would ultimately need some kind of capital injection,'' said Mo Jae Sung, a fund manager who helps oversee the equivalent of $995 million at Hanwha Investment Trust Management Co. in Seoul. ``With bad loans rising and banks coming under government pressure to extend more loans, banks will need recapitalization.''

Fund for Bond Investments

Woori, 73 percent state-owned and parent of the country's second-biggest bank, fell by the daily limit of 15 percent to 5,300 won at the 3 p.m. market close, the lowest since May 2003. Hana Financial Group Inc. also plunged 15 percent to a record low of 16,850 won. The 54-stock Korea Financial Industry Index dropped 5.7 percent.

South Korea plans to set up a 10 trillion won fund -- to be pooled not just from state agencies but also from private financial firms -- to vitalize investments in corporate bonds, including those issued by banks, FSC Chairman Jun Kwang Woo later told reporters in Seoul. The fund, that would help lower the cost of financing, ``will be used at the minimum level to correct temporary market failures,'' he said.

``Injecting public funds is a very sensitive issue,'' Rhee said. ``Banks' individual efforts to improve their capital adequacy are expected to raise their capital ratios to above 11 percent by early December.''

Net income at South Korea's 18 banks slumped 36 percent to 8.4 trillion won in the first nine months of this year on higher provisions against bad loans, the Financial Supervisory Service said on Nov. 11. The average capital-adequacy ratio at South Korea's 18 banks dropped to 10.79 percent at the end of September from 11.36 percent three months earlier as a global market slump eroded shareholder equity, the agency said.

Bond Sale

``Korean banks' capital adequacy ratios are still very sound,'' Rhee said today. The government will leave it up to banks to improve their capital standing before the state considers any measures, he said.

Kookmin Bank, the country's largest, started selling 800 billion won of subordinated bonds this week after it depleted capital to set up its holding company, KB Financial Group Inc. The bank's Tier 1 ratio was 9.14 percent at the end of September. Woori Bank, whose Tier 1 ratio stood at 7.6 percent, is planning to sell as much as 1 trillion won of the notes before the end of the year.

KB Financial dropped 5 percent to 30,450 won, the lowest since the stock began trading in Seoul on Oct. 10. Shinhan Financial Group Co. lost 6.4 percent to 32,000 won.

To contact the reporters on this story: Bomi Lim in Seoul at blim30@bloomberg.net

Last Updated: November 13, 2008 02:25 EST

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