Merchant Banks Suffering

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Merchant Banks Suffering

Merchant banks are suffering due to the bonds they issued early this year.
The reason is that the denominated interest rates of the bonds (all five year due) were roughly 20 percent early this year but now the yield levels for the bonds are no more than 10 percent.
The reported amount of the bonds issued by 13 merchant banks early this year is about 750 billion won.
A source at a merchant bank said, 'Most merchant banks are suffering staggering losses based on the issuance of the bonds.'
Accordingly, merchant banks are requesting the government to approve issuing bonds with one or three year maturities.
But since regulations concerning bonds issued by merchant banks are made by the BIS (Bank for International Settlements), not by the government, the government does not have the authority to make any changes in the regulations.
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