Money Games

Chapter 5Deadline Looming

I considered legal action against the Korean government an absolute last resort, and for the moment it seemed as if I might not need it. The following day, March 16, we had a six-hour meeting with the FSC in its office, during which the FSC team finally agreed to using forward-looking international best practices instead of Korean standards for assessing and classifying loans. We agreed that the guidelines would be worked out by advisors of both parties and implemented by the management of KFB.

This meeting also brought an interesting change in the negotiation dynamics: Gokul Laroia, a vice president at Morgan Stanley, took the lead during our discussions. The FSC team members did not say much. According to Laroia, the Morgan Stanley and PwC teams had spent a lot of time working with the FSC to agree to use forward-looking standards. Unfortunately, there remained a sizable gap between our positions on the mark-to-market and other issues, so I had no choice but to reject their offer. But at least, I thought, this was a start.

My optimism did not last long. The next day we returned to the conference room of the FSC's office to pick up where we had left off. At the beginning of the meeting I began to propose that advisors from both sides work out the guidelines for forward-looking loan classification, as we had agreed a day earlier. This time, however, BS Kang, who was leading the FSC negotiations, said that he needed to consult with his superiors before ...