Korea Merchant Banking gets a big break

A merchant bank hit by deposit runs finds unexpected help from Korea''s regulators.

Cash-strapped Korea Merchant Banking Corp (KMBC) has received an unexpected lifeline after the Korean government decided to acquire a higher-than-expected amount of Daewoo debt The decision comes just days after the Korean government decided to bail out KMBC with new funds, making it the first and only merchant bank to receive such treatment from the government

Analysts believe the two actions together should slow the wave of deposit runs taking place at KoreaÆs third largest merchant bank, giving the bank enough room to work through the liquidity crisis that had been threatening its solvency

ôIt really has to do with sentiment, as Korea Merchant BankingÆs asset quality is not that bad," says Daniel Yoo, analyst...

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