Sitting in a lake teeming with wildlife, several hours by train from Seoul, South Korea’s Legoland is an unlikely poster child for the global struggle to fight inflation while maintaining financial stability.
But a default on 205 billion won ($155 million) worth of debt by the theme park’s developer triggered the worst meltdown in South Korea’s 1.69 quadrillion won credit market since the global financial crisis. And as interest-rate hikes batter real estate markets around the world, it’s a reminder that even relatively safer financial systems like South Korea’s — labeled "resilient” earlier this year by the International Monetary Fund — face threats of contagion.
South Korea’s central bank embarked in August last year on one of the earliest rate-hike cycles in the world, and is still battling inflation that at one point reached the highest level in more than two decades.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.