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Shadow Banking Stress in South Korea Sends Warning to Global Investors

(Bloomberg) South Korea is emerging as a closely watched weak link in the $63 trillion world of shadow banking.Most Read from BloombergTrump Has Only $6.8 Million for Legal Fees With Trial UnderwayRay Dalio’s Famous Trade Is Sputtering and Investors Are BailingStocks Climb as US Earnings Kick Into High Gear: Markets WrapTikTok to Remove Executive Tasked With Fending Off US ClaimsRussians Transform Dubai as They Flee Putin’s War: Photo EssayReal estate exposure has been showing cracks at home ....

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Era of easy money ends for South Korea

South Korea’s Legoland is an unlikely poster child for the global struggle to fight inflation while maintaining financial stability.But a default on 205 billion won (US$155mil or RM682mil) worth of debt by the theme park’s developer triggered the worst meltdown in South Korea’s credit market since the global financial crisis. And as interest-rate hikes batter real estate markets around the world, it’s a reminder that even relatively safer financial systems like South Korea’s face threats of contagion. ....

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