How a property default started the credit crunch

TheStar Mon, Dec 12, 2022 12:00pm - 9 months View Original


SEOUL: Global central bankers are in a race against the clock to to tame runaway inflation. But push too far, too fast, and markets key to the smooth functioning of the financial system are liable to buckle.

That’s just what happened recently in South Korea, where the credit market experienced its worst run up in short-term yields since the global financial crisis.

At the heart of the crisis was a type of short-term debt used to finance the nation’s construction boom. It’s called project finance asset-backed commercial paper, or PF-ABCP.


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