Korea: Hairball Lehman (LEH) Too Risky For State Bank To Buy

When Korean government regulators reviewed the possibility of government bank KDB taking over Lehman Brothers (LEH), it wasn’t love at first sight. Jun Kwang-woo, Chariman of South Korea’s Financial Services Commission said that KDB should be “cautious,” stressing that such deals should be done by private players. FT:

“In principle, taking over a global investment bank can become an opportunity to raise the capability of the [Korean] investment banking business,” Mr Jun said. “But at the same time, as the risks are also big, KDB should take a cautious approach.”

“We welcome any efforts led by the private sector to go global, but it may not be proper for state-owned financial institutions to lead the role and take on excessive burdens,”

“Excessive burdens” may be the most diplomatic way to describe the $75 billion or so worth of risky assets Lehman has on its balance sheet. Either way, it’s a shame U.S. regulators aren’t as wary of risky behaviour as their Korean counterparts.

See Also: Another Bomb That Citi (C) and Lehman (LEH) Hold: Commercial Real-Estate Loans
Dick Bove: Lehman (LEH) CEO Fuld Hopeless, Hostile Takeover At $20 Per Share

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