South Korea and Wall Street: Deal or no deal?
September 6, 2008 – 12:02 amA state-owned Korean bank nurtures a longing for Lehman Brothers
THERE is something of the scrappy outsider about both South Korea and Lehman Brothers, a Wall Street firm desperately in need of capital to strengthen a balance sheet battered by mortgage losses. So when Min Euoo-sung, chairman of the Korean Development Bank (KDB) said on September 2nd that his state-owned firm was trying to lead a group of Korean banks into taking a stake in Lehman, it had a ring of truth.
KDB, like other Korean banks, dreams of turning itself into a force in global banking. Lehman may be that once-in-a-lifetime opportunity to buy into the big league. It is cheap. It does not appear to have suffered large client and counterparty defections. And unlike Bear Stearns, its erstwhile rival, it can access liquidity at the Federal Reserve’s discount window. If Lehman survives, it could be a profitable—and strategic—investment. …
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