More Korean banks keep shutting down as regulators get serious
about staving off a run on retail deposits. So far, the market has
held up like a rock. The tally of savings banks suspended from
normal operation in the last month now stands at seven, of which
six -- including the biggest Korean institution in its class, Busan
Savings Bank -- have come in the last week. As it is, the
government is still allocating about 20 trillion won (
) -- roughly $20 billion -- to fund the process of restructuring
the country's apparently failure-ridden
. Giants like Woori (
) are already helping out in the bailout process, grabbing $44
million in bonds from failed banks and pondering outright
absorption of at least one of them. So far,
) and (
) have yet to get involved, although they have each expressed
interest in getting a savings bank for themselves out of this.
Meanwhile, inflation pressures are reportedly becoming an outright
"threat" to finance minister Yoon, so more interest rate hikes are
likely to be in the cards.
) is the ETF to play here. Options and volatility are relatively
cheap here as well. If EWY tumbles, there are plenty of fast money
guys eager to pile on at these levels.