A few days later.
Team Leader Han set foot on Korean soil after a long ti.
Originally, I planned to call him back after the subpri mortgage crisis ended, but because of the KIKO situation, it was brought forward a bit.
"I'm sorry to call you back to Korea during such a busy ti."
"No, thanks to experts like Rajan, a lot of work has been reduced. Because they've been
analyzing data nonstop, I've even been able to leave work on ti lately."
I t Team Leader Han in Captain Kang's office.
His face had definitely improved a lot.
When I saw him in the U.S., he looked more like a mummy or a zombie than a person, but now his complexion had returned.
"The U.S. real estate bubble won't burst imdiately, but there's sothing interesting I need you to do in the anti."
"If it's sothing the boss asks, I'm ready to work diligently on it. Especially if it's work in
Korea, I'll put in even more effort."
"Rember, I promised? Once the subpri mortgage crisis is over, you'll be sitting in the CEO seat of Taewoo Securities."
"Of course I rember! That promise is what's kept from dying of overwork so far."
Team Leader Han's eyes were burning with determination.
He was strongly resolved to return to Taewoo Securities, which he considered his hotown.
"To return to Taewoo Securities, you still need to make a na for yourself in the Korean
financial industry, right?"
"If you give the chance, I'll definitely make a na for myself."
"I hear the Korean financial industry is selling KIKO derivatives — targeting Korean small and dium export companies."
Team Leader Han gave a bitter laugh.
He had sold KIKO products directly to Japanese companies and knew well how those companies had suffered, so his laugh was one of disbelief.
"Ha! You an the derivatives we sold in Japan? That's practically gambling. Banks that
prioritize stability shouldn't be touching that product."
"Wall Street sells subpri derivatives too. Do you think Korea would be any different?"
"That's true. I montarily forgot that banks are ultimately places that deal in money, and if
there's profit to be made, they don't really care if others get hurt."
Team Leader Han had worked longer on Wall Street than at Taewoo Securities.
Because he knew well how ruthless and heartless the financial world could be, he quickly
understood the current situation.
"Aren't we the ones who first created and sold the KIKO product? So, we have to clean up the ss ourselves, right?"
"How do you suggest we handle the cleanup?"
"I'll give you the list of small business owners who bought the KIKO product. Go et them and pressure the banks to release KIKO-related insurance products."
"So, you're saying the banks should be held accountable too."
KIKO was a kind of currency speculation product.
Depending on the won-dollar exchange rate, subscribers would either make a profit or suffer a loss.
In the process, the banks rely took a cut as interdiaries—like a third party.
But if insurance products related to KIKO were introduced?
If the exchange rate soared, the banks would have to pay huge insurance claims to the
subscribers.
Simply put,
Currently, the banks are positioned as dealers.
But the mont insurance products are launched, they would fall from dealer to gambler.
Dealers don't care who wins or loses in gambling, but once they beco gamblers, they can only be winners or losers.
"Isn't it ti for Korean finance to get a taste of advanced financial techniques?"
"We'll give them exactly the kind of taste they learned on Wall Street. And since we created
KIKO, we know exactly how to attack it."
"There will soon be a eting with small and dium enterprises affiliated with Taewoo Group. I'll invite you as a special speaker. Make sure you put your plan into action."
"I'll report good news soon."
Team Leader Han was confident.
It wasn't arrogance.
He was the very person who first created the KIKO derivative product and had already applied it several tis, so his confidence was well-founded.
The eting was held swiftly.
Many representatives from small and dium-sized enterprises attended the eting held at
Taewoo Group's headquarters.
I delivered the opening remarks, emphasizing the importance of this gathering.
Of course, after the opening speech, I stepped back and left the rest of the work to Team Leader Han.
About four hours later,
I received a call from Team Leader Han telling that the eting had concluded, and we t at Captain Kang's office, each arriving in our own cars.
"How did it go? Were you able to persuade the small business owners?"
"It wasn't easy. I explained the risks of KIKO thoroughly, but they were hesitant about the costs involved in signing up for the insurance product."
"So, what did you do?"
"I made a proposal. I agreed to cover the entire cost of joining the insurance product and the
monthly premiums. In return, I negotiated to take 60% of the premiums collected."
As expected from Team Leader Han.
Without my intervention or advice, he found a way.
His capabilities were excellent, and having worked with for a long ti, he understood
exactly how I wanted things done.
"We'll be holding a few more etings. Convince them all to sign up for the insurance."
"Since I'm covering all the costs, getting them to subscribe isn't difficult, but the insurance
product must be launched by the banks before anyone can sign up."
"Why would the banks refuse? If they create an insurance product, hundreds of small business owners will willingly subscribe."
"True. They made a KIKO derivative product just to earn commissions. If there's more money to be made from insurance premiums, they'd probably create new insurance products overnight."
Now it was ti for the banks to step off the dealer's chair and join the gamblers.
Once Team Leader Han took the lead, banks would easily descend from dealers to gamblers.
The only question left was how high the stakes would be set.
If the banks got too greedy?
It would be a repeat of what happened during the subpri mortgage crisis, where Wall Street's investnt banks collapsed.
***
VIP lounge, Shinwha Bank headquarters.
Team Leader Han sat comfortably on a sofa, conversing with Deputy Head Jung Tae-seop of
Shinwha Bank.
"You worked at Taewoo Securities and then about ten years at a Wall Street investnt firm.
What brings you here to see ?"
He was a very important figure—the deputy head of a bank—second only to the bank president, holding imnse power.
Responsible for developing financial products and overseeing actual business operations, eting such a person was no easy feat.
However, Team Leader Han had considerable experience too.
Having served as an executive at a Wall Street investnt firm, he easily arranged this eting.
"A banker from Wall Street talking business—this definitely piques my interest."
"I heard your bank is selling KIKO derivatives. But I don't understand why there's no insurance product related to KIKO."
"Insurance for a derivative product? Hmm, it's not impossible to create, but who would sign up for that?"
Deputy Head Jung scoffed.
He'd reluctantly made ti for soone who claid to have learned advanced financial
techniques on Wall Street, only to hear about insurance for derivatives.
Of course, if they could sell it, all the better—double commissions.
But who would actually buy such insurance?
Even selling fire insurance required begging.
"I don't just talk. I brought consent forms signed by small business owners who purchased KIKO products from Shinwha Bank. They all agreed to sign up if Shinwha Bank launches KIKO insurance."
"...Is that so?"
Team Leader Han pulled out nurous consent forms from his bag.
Deputy Head Jung's lips curled up slightly as he looked over them.
"Very well! Let's aim to launch the KIKO insurance product within this week."
"You speak very clearly. To help with the launch, I've prepared a draft for the insurance product."
Team Leader Han handed over the draft.
Its main points were:
1. A 3-year insurance contract.
2. If the exchange rate rises more than 60% from now, the insurance pays out 10 tis the
amount of the KIKO derivative product.
3. In return, the policyholder pays a monthly premium of 3% of the KIKO derivative amount.
"Hmm, paying out ten tis sounds a bit risky."
"But the monthly premium is 3%! I understand Shinwha Bank sold about 500 billion won worth of KIKO products. That ans a monthly premium inco of 15 billion won. To earn that level of premium inco, the payout has to be about 10 tis, doesn't it?"
A monthly profit of 15 billion won.
The deputy head licked his lips.
It was certainly a tempting amount.
"Still, paying out ten tis the amount is a bit much."
"The exchange rate must rise by 60% for the insurance conditions to kick in. Do you really
expect that to happen?"
"The won-dollar exchange rate has already stabilized. I believe it will either stay steady or even decline rather than rise. And a 60% rise? That's impossible unless the IMF crisis returns."
"Then why hesitate? Where else can you find a safer product with such huge potential returns?"
The deputy head felt a strange familiarity.
He was hearing the sa argunt they had used when selling the KIKO derivatives to small
businesses.
"I'll discuss this with my staff and get back to you."
"One more thing. If the insurance product isn't launched under these terms, all the companies I represent as an agent will demand refunds or cancel their KIKO derivative contracts."
"W-what...?"
Five hundred billion won worth of contracts being refunded at once?
That could seriously damage Deputy Head Jung's career, as he was aiming for the bank
presidency.
"Why are you going this far?"
"I don't want much. Just give 1% of the insurance premiums as my commission. Isn't that a fair deal?"
"Ha."
Deputy Head Jung Tae-seop smiled.
They say the Wall Street guys are nothing but hyenas.
In the end, this guy was just looking out for his own profit, fleecing small business owners.
That was actually a relief.
If he was doing this as a broker rather than with so other hidden agenda, it was
understandable.
"I will do my best to launch the insurance product based on your draft."
"Thank you! And if I co up with any new products later, I'll be sure to contact you first."
"Hmm, there's no need to co find personally. I'll have my team handle it. Communication will be faster that way."
Han extended his hand.
But Deputy Head Jung ignored it and stood up.
He didn't want to shake hands with a hyena that was preying on small business owners.
Watching this, Han smiled inwardly.
Who's really looking down on whom now?
Let's see how long that high-and-mighty attitude lasts.
Still smiling, Han stood and walked out.
He lingered for a mont, staring at Jung Tae-seop's figure by the window,
almost as if morizing his prey.
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