"Did you just say foreign exchange crisis?"
Chairman Park Tae-hong, visibly startled, stared at Seok-won, who replied in a slightly more subdued voice.
"Yes."
Across from him, his older brother also looked shaken as he spoke.
"A currency crisis? Don't you think that's a bit of a stretch?"
"It's a conclusion I reached after carefully and repeatedly analyzing everything that's happened since the reverse Plaza Accord between the U.S. and Japan last year."
Seeing the seriousness on Seok-won's face—with not even a hint of a smile—President Park Jin-hyung started to argue but stopped short, falling silent.
Chairman Park Tae-hong was just as speechless.
If anyone else had said this, he would've scolded them for being overly paranoid. But this was Seok-won—whose sharp instincts and keen investment sense had surprised them time and again. They couldn't simply brush his warning aside.
Especially after he had accurately predicted the hostile takeover attempt targeting Mido Department Store and personally handled the management dispute with Donghae Group—his words now carried even more weight.
As the room sank into a heavy silence, Chairman Park straightened his posture and spoke.
"You're right that the current account deficit keeps accumulating and that a large amount of foreign capital has flowed in. But we still earn a lot of dollars every year from exports. To be honest, it's hard for me to believe that we could be headed for a currency crisis."
His older brother nodded in agreement.
And that likely reflected the thoughts of many, including government officials and financial authorities.
After all, Korea had brought in more than $125.2 billion in export revenue just last year—an immense inflow of foreign currency. So the skepticism was understandable.
"You're right. Even with the deficits, the steady inflow of dollars each year should, under normal circumstances, make the chances of a crisis extremely low."
Seok-won glanced between his father and brother, who were now both listening with full attention.
"But if an unexpected shock hits the system, things could change quickly."
At that, Chairman Park frowned slightly.
"By unexpected shock, are you talking about the Japanese banks adjusting their BIS capital ratios?"
"The massive unwinding of yen carry trades is definitely a risk factor. But since that's already a known event, I wouldn't call it a 'surprise.'"
"Then… are you saying there's something else?"
"If something goes wrong, it's the abnormally high short-term external debt and the massive foreign investment in the stock market that will become the real ticking time bombs."
Chairman Park Tae-hong looked puzzled, prompting Seok-won to explain more clearly.
"You probably know that investment finance companies have been borrowing short-term funds from overseas—where interest rates are lower—and using that to provide long-term loans. It's a classic case of maturity mismatch being used to generate profits."
Chairman Park nodded, recalling how Go Young-il, CEO of Daeheung Securities, had once tried to launch a lending business using that exact model.
"And it's not just the investment finance firms. Almost every major conglomerate is borrowing large sums of foreign currency through the Hong Kong capital markets."
President Park Jin-hyung chimed in.
"If you try to raise money domestically, you're stuck paying over 14% in interest. But if you use foreign loans, it's only 7 or 8%. Of course they're going to prefer foreign debt."
"Exactly. The larger the loan, the bigger the gap in interest payments. If it were me, I'd use foreign debt too."
Seok-won nodded in agreement.
The high domestic interest rates were largely the result of internal structural issues.
"As the economy grew rapidly, the demand for investment capital skyrocketed, but savings couldn't keep up. Naturally, the 'price of money' went up."
On top of that, inflation had risen alongside economic growth, prompting the Bank of Korea to deliberately keep interest rates high.
"But the real issue is that most of this foreign debt is in short-term instruments—and the total amount is reaching dangerously high levels."
Short-term loans carried lower interest rates than long-term ones, so to maximize profits, investment finance firms had relied heavily on short-term borrowing—most with maturities under one year.
Corporations were no different, favoring short- to mid-term loans of one to three years, if not as aggressively as the financial firms.
"Sure, it makes sense that companies and investment firms would prefer short-term loans—they're cheaper, and they can always roll them over as needed. Why would anyone lock in a high-interest long-term loan when they can borrow cheaply whenever they want?"
Seok-won turned his gaze toward Chairman Park, who sat with arms crossed.
"That was only possible because liquidity had been overflowing up to now. But the situation is starting to change."
Chairman Park spoke in a firm voice, clearly beginning to understand.
"If yen-based capital pulls out, then borrowing foreign debt won't be as easy as it was before."
Seok-won nodded in agreement and continued.
"On top of that, the U.S. is shifting to a strong-dollar policy, which is only adding fuel to the fire. Even if foreign interest rates are lower than domestic ones, a rising exchange rate could cancel out those benefits—or worse, end up costing more in the end."
Sensing the severity of the situation, both men had now fallen completely silent, their expressions turning grave.
"We're technically under a managed float system, but in reality, it's almost a fixed exchange rate. Even so, the won-dollar rate, which was in the 700-won range last year, has already jumped to 826 won. That alone should be sounding alarm bells."
"..."
"The situation is incredibly fragile, and yet the government's foreign exchange reserves are only $36.5 billion. That's nowhere near enough to deal with a full-blown crisis."
"You're saying… that's not enough?"
President Park Jin-hyung asked with a puzzled look.
"Didn't the Ministry of Finance and Economy recently announce that the total external debt was $85.32 billion, and that it could surpass $100 billion by year's end? I'm sure a large portion of that is short-term debt. And like you said earlier, if the economy slows down and the exchange rate spikes, that short-term debt—repayable in dollars—could turn into a nightmare overnight."
"Good grief."
Imagining the scenario Seok-won had just described, President Park Jin-hyung gulped unconsciously.
Even he felt a chill at the thought of suddenly having to pay off soaring interest costs.
"If that happens, foreign investors in our stock market are also likely to pull their money out to avoid exchange rate losses. And if that kind of hot money rushes out all at once, the government's $36.5 billion in foreign reserves will melt away like ice under the summer sun."
As Seok-won wrapped up his long explanation, the atmosphere in the study had shifted. A heavy silence replaced the earlier tension.
The scenario was so shocking, the stillness made sense.
Seok-won remained seated, silently waiting for his father and brother to collect their thoughts.
Before long, Chairman Park Tae-hong let out a deep sigh and finally broke the silence.
"When you said you had something important to talk about, I figured it was serious—but I didn't expect a bombshell like this."
"No kidding," President Park Jin-hyung agreed, his face stiff.
He rubbed his eyes wearily, a hint of resentment in his gaze.
The Donghae Group incident had only just been resolved, and they'd barely had a moment to breathe before being hit with another potentially devastating issue—it was enough to make anyone feel overwhelmed.
"How likely do you think it is that this foreign exchange crisis will actually happen?"
When Chairman Park asked, Seok-won responded without a moment's hesitation.
"If the government pushes through with joining the OECD, and the domestic financial markets open up, bringing in even more hot money, and if short-term debt continues to increase like it is now, I'm certain the crisis will come."
He didn't even pause before continuing.
"That's why I already converted all of the venture fund's available cash into dollars."
"Already?"
"Yes."
His swift action left them both a bit awestruck.
Chairman Park let out a low groan, visibly troubled by Seok-won's firm conviction that a crisis wasn't just possible—it was inevitable.
"So we should do the same—convert our cash holdings into dollars like the venture fund?"
"Not just that. We need to cut back on spending for things like factory expansions and adopt a tight austerity policy. At the same time, we have to eliminate interest burdens by paying off all debt. But since that's not realistic, at the very least, we should restructure everything into long-term loans and clear out all foreign currency debt."
Seok-won's voice was resolute.
President Park Jin-hyung leaned forward with a conflicted expression.
"The amount of foreign currency debt we've taken on isn't small. Converting all of it into won-denominated loans won't be easy—and the interest burden would be much higher than it is now."
"Even if it's difficult, we need to start preparing now. Otherwise, when the crisis hits, we'll be swept away like debris in a flood."
"But this is all just a possibility, right? We can't say with 100% certainty that there will be a currency crisis."
President Park tried to push back, but Seok-won was unwavering.
"If the crisis becomes clear to everyone, by then it'll be far too late."
From Seok-won's perspective—knowing the future—it was maddening to see them hesitate.
Still, he understood how hard it was to act decisively when the danger didn't yet feel real.
In midair, their eyes met—and for a brief moment, tension hung in the air.
Then, Chairman Park Tae-hong broke the silence in his heavy voice.
"Just like with the Mido Department Store."
As both sons turned to look at him, the Chairman Park leaned back on the sofa and continued.
"You warned us early on that the group's governance structure had issues and needed to be reformed. But we didn't listen—we kept putting it off. And in the end, Donghae Group targeted our weak point, Mido, with a hostile takeover. We nearly lost the entire group because of it."
"That's…"
President Park Jin-hyung trailed off, chewing his lip in frustration.
He, too, had dismissed the warnings, thinking it was unlikely anything would happen—and using the excuse that restructuring the governance would take too much time and money. But in the end, they'd paid the price for their delay.
"One mistake is enough."
Chairman Park turned to his eldest son—the heir to the group—and asked him directly.
"Isn't that right?"
After a moment of serious thought, Park Jin-hyung nodded.
"Yes, you're absolutely right."
Chairman Park then shifted his gaze to Seok-won and continued.
"Still, we can't just go along with your younger brother's words alone. So I want you to work with Secratary Gil and assess whether this crisis really is likely to happen. We'll decide what to do after that."
Given how important this decision was to the future direction of the group, Chairman Park chose to proceed cautiously. At the same time, he was careful to involve his eldest son in the process to avoid causing resentment or a sense of being sidelined.
'This is probably the best I can hope for right now.'
Although Seok-won wished they would take action immediately, he was at least satisfied that both his father and brother now recognized the seriousness of the situation.
Chairman Park picked up his teacup but put it back down when he realized the coffee had long since gone cold. He let out a quiet sigh.
"And now it's a foreign exchange crisis. Every time you say you've got something to talk about, it feels like you're dropping a new bomb. I swear, my heart skips a beat."
His gruff tone made President Park Jin-hyung glance at Seok-won with a similarly troubled expression.
"I feel the same way."
Seok-won shrugged, feigning innocence.
"Still, it's better than being blindsided with no warning, isn't it?"
Chairman Park clicked his tongue at his cheeky tone.
"Tsk. If you didn't talk so much, I might not find you so irritating."
"Exactly," President Park chimed in, nodding