Either Korea is truly nervous about its state bank KDB buyind a stake Lehman Brothers, or it’s using the press to negotiate with Lehman CEO Dick Fuld:
FT: South Korea’s top financial markets regulator on Monday said that state-run Korean Development Bank (KDB) should think carefully about buying a stake in Lehman Brothers given the state of international markets, in an indication that the government would not support a potential deal.
KDB said last week that it was in talks about a possible investment in Lehman, the beleaguered US investment bank that is under pressure to raise more capital before it reports its earnings later this month.
Jun Kwang-woo, chairman of Korea’s Financial Services Commission, on Monday applauded KDB’s efforts to branch out overseas to become a global investment bank but questioned the merits of such a deal “in terms of timing and priority”.
“[KDB] should take a cautious approach toward taking over Lehman, given its characteristics as a policy bank ahead of its privatisation and current conditions in domestic and foreign financial markets,” Mr Jun said.
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