The next day, with the won-dollar exchange rate still hovering above 1,000 won per dollar and the foreign exchange market in extreme turmoil, Deputy Prime Minister for Economic Affairs Lee Eun-hyung and Bank of Korea Governor Noh Kang-woong were summoned to the Blue House by the President.
Outside the large window on one side of the office, dark, ominous clouds hung thick in the sky, reflecting the tense atmosphere surrounding the nation.
President Kim Sung-gyu, seated at the center of the main table, glared at the two men—Lee Eun-hyung and Noh Kang-woong—sitting side by side to his left. His voice exploded in anger.
"You said the exchange rate would never cross 1,000 won! So what the hell is going on here?"
Lee Eun-hyung, visibly ashamed, lowered his head.
Just a few days earlier, he had made bold promises about the exchange rate in this very room, leaving him without a shred of defense now.
"The media is already speculating that we could face a currency crisis like the Southeast Asian countries. Is that true?"
Pressed by the President, Lee Eun-hyung, with beads of sweat forming on his forehead, quickly responded.
"It's true that speculative forces have launched attacks, taking advantage of the spike in the exchange rate. But the situation isn't serious enough to call it a currency crisis."
"Then why the hell is the exchange rate surging like this?"
"It's a temporary phenomenon caused by a chain reaction—starting with the bankruptcy of major conglomerates like Hanbo Group, leading to financial sector instability, credit rating agencies downgrading our national credit rating, and a stock market crash that has driven foreign investors to pull out."
President Kim shifted his gaze toward Noh Kang-woong.
"Do you agree with that assessment?"
Governor Noh cast a sideways glance at Lee Eun-hyung before replying in a firm tone.
"It's true that, unfortunately, multiple negative factors have overlapped and destabilized the exchange rate. But as we've seen in Southeast Asia and Hong Kong, the moment we show weakness, these speculative wolves will pounce without hesitation. That's why I believe we need to take preemptive action before the situation escalates further."
"Tsk!"
Clicking his tongue sharply, President Kim asked again.
"So what exactly are you suggesting we do?"
Noh Kang-woong answered immediately.
"We must use our foreign reserves more aggressively to defend the exchange rate."
Hearing this, President Kim's expression turned sour with disappointment.
"Aren't we already doing that?"
"I'm not talking about just throwing buckets of water on the flames every time the rate surges—enough to reduce the spikes temporarily. I'm saying we need to drop a water bomb and douse the entire overheated market at once."
"But wouldn't draining our foreign reserves too much put us at even greater risk?"
Sitting across the table, Chief Presidential Secretary Koo Hyung-ki voiced his concern.
"Of course, there's a risk in doing that. But to prevent the situation from escalating into a full-blown currency crisis, as the media is suggesting, we must show through decisive action that the government will not stand idly by while the exchange rate soars."
Deputy Prime Minister for Economic Affairs Lee Eun-hyung, seated beside him, quickly chimed in.
"That's right. Look at Hong Kong—they stood their ground with a firm stance and managed to repel the attacks of those speculative forces that devastated Southeast Asia."
"Hmph."
But President Kim Sung-gyu still hesitated, unable to make a swift decision. Seeing this, Lee Eun-hyung pressed his point further.
"If we actively defend the exchange rate and at the same time create conditions to lure back foreign investors, which would bring in fresh dollars, we can calm the anxiety in the foreign exchange market."
"And how exactly do you propose we do that?"
Noticing the President's interest, Lee Eun-hyung immediately presented his plan.
"We should raise the foreign ownership limit on Korean stocks from the current 23% to 26%."
"Will that really work?"
The President asked, his face showing clear doubt. But Lee Eun-hyung responded with firm confidence.
"Every time we've raised the limit before, foreign investors have brought in dollars and bought up our stocks without fail. I'm confident they'll do the same this time."
"But the stock market is in freefall, and with big companies collapsing one after another, the market sentiment is terrible. There's no guarantee they'll come back this time."
Chief Secretary Koo interjected, pointing out the flaw, and President Kim nodded slightly in agreement.
"Koo has a point. If we raise the limit and they still don't return, it'll all be for nothing."
But Lee Eun-hyung was ready with his argument.
"Yes, the market is in bad shape. But precisely because the exchange rate has risen and the KOSPI has plummeted, it actually creates an attractive opportunity for foreign investors to come back in."
"And why's that?"
"It's simple. With the exchange rate up, they can convert the same amount of dollars into more won—meaning they'll make a profit from currency gains right from the start. Plus, with stock prices crushed by panic selling and trading below their real value, they can buy in cheap now and reap massive gains once the market rebounds. Frankly, there's no easier way for them to make money."
"Hmph. When you put it like that, it does make sense."
President Kim, starting to be persuaded, nodded slowly. Sensing his chance, Lee Eun-hyung leaned forward and spoke with even more conviction.
"If we move decisively and stabilize the exchange rate quickly, those speculative forces—who already got badly burned in Hong Kong—will likely back off in fear."
President Kim tapped his fingers lightly on the armrest of the sofa, mulling over the proposal. After a brief pause, he finally made his decision.
Then, lifting his head again, he looked squarely at Lee Eun-hyung.
"Fine. I'll give you full authority on this. Do whatever it takes to stabilize the exchange rate."
At those words—exactly what he had hoped to hear—Lee Eun-hyung's tense expression finally relaxed, and he bowed his head.
"I won't let you down, Mr. President."
"You're well aware there's a presidential election coming up in December, aren't you?"
"..."
"Make sure this is resolved before the election campaign kicks off in earnest. I don't want anything that could negatively affect the vote. You understand what I'm saying, right?"
Feeling the weight of President Kim Sung-gyu's steady gaze, Deputy Prime Minister for Economic Affairs Lee Eun-hyung immediately bowed his head.
"Yes, sir. I'll see to it."
President Kim leaned back against the sofa with a sigh, his voice edged with irritation.
"Not a single peaceful day, even at the end of my term."
***
September 10, 1997.
The large black Mercedes sedan carrying Seok-won was crossing Dongjak Bridge, speeding along the Gangbyeon Expressway.
"...With the exchange rate holding above 1,000 won per dollar for several consecutive days and the foreign exchange market remaining unstable, Deputy Prime Minister for Economic Affairs Lee Eun-hyung today announced emergency measures to stabilize the financial markets from the government complex in Gwacheon.
*Key points include expanding bond market access by increasing the limit for large corporations' investments in non-guaranteed convertible bonds (CBs) starting January 1 next year and completely removing limits for small businesses, as well as expanding foreign cash loan channels through foreign currency bond issuance.
In addition, to stabilize the stock market, the investment share of pension funds will be significantly increased, and listed companies will be encouraged to buy back their own shares. Foreign ownership limits will also be raised to 26% starting the day after tomorrow.
Furthermore, to curb the sharp rise in the exchange rate, the government announced that it would immediately ban foreign currency purchases for deposit and holding purposes, which had been scheduled to start next month.*
Deputy Prime Minister Lee urged companies and financial institutions to actively cooperate in stabilizing the foreign exchange market…"
Leaning back against the leather seat in the rear, Seok-won gazed blankly out at the wide stretch of the Han River as it rolled by. Clicking his tongue quietly at the news blaring from the radio, he muttered.
"The fundamentals are wrecked, and foreign investors are fleeing Korea in droves. There's no way they'll come back just because they raised the investment cap."
In reality, foreigners had been offloading stocks and steadily pulling out their investment funds. Far from bumping up against any limits, their ownership share had already shrunk significantly.
Under such circumstances, expanding the investment cap would hardly make much difference.
"If anything, it just sends a signal that the government is desperate—foreign investors will hear that like an evacuation siren, telling them to get out while they still can."
Just then, Han Ji-sung, his deputy seated in the front passenger seat, turned around and asked,
"Sir, did you say something?"
"It's nothing. How much longer till we get to HQ?"
"We just passed Wonhyo Bridge, so we should be there in about five minutes."
Seok-won gave a small nod and turned his gaze back to the window.
A short while later, they arrived at Daehung Group's headquarters in Mapo. Seok-won stepped out of the car along with his aide, Han Ji-sung, and headed straight up to the chairman's office.
When he pushed open the door to the outer office, six male and female staff seated at their desks immediately stood up upon seeing him.
"The chairman's inside, right?"
At Seok-won's question, Chu Se-young, whose forehead was starting to bald, quickly stepped forward and answered.
"Yes, sir. The chairman specifically instructed us to escort you in as soon as you arrived."
Seok-won turned his head slightly and spoke to Han Ji-sung.
"Han, wait here."
"Yes, sir."
As Seok-won strode forward, Chu lightly knocked on the solid wood door leading to the chairman's office, then turned the handle and stepped aside to let him through.
Passing by Chu, Seok-won entered the spacious office where Chairman Park Tae-hong sat on the central sofa, flanked on either side by his elder son Park Jin-hyung, president of Daeheung Textiles, Secretary-General Gil Seong-ho, and Executive Director Cho Yun-won.
Chairman Park, holding a cigarette between his fingers, lifted his head to see Seok-won and gestured toward an empty seat.
"You're here. Sit down."
With a polite nod to his father, Seok-won walked over to the empty spot next to his elder brother. As he exchanged brief eye contact and nods with the other two men and took his seat, Chairman Park turned to Executive Director Cho and spoke.
"Go on. Continue with what you were saying."
"Yes, sir."
Executive Director Cho cleared his throat quietly before speaking.
"A few days ago, following the bankruptcy of Ssangbong Group and now Gwangju's Hwani Department Store, the banks we've been dealing with have notified us that they can no longer extend the loans we requested."
Chairman Park's thick eyebrows furrowed slightly as he responded.
"But just last week, they said it wouldn't be a problem, didn't they?"
Meeting the chairman's gaze, Executive Director Cho answered with a troubled look.
"That's correct. But since then, the exchange rate has surged, and more critically, the wave of corporate bankruptcies has left financial institutions saddled with a mountain of bad debt that's grown beyond what they can manage. It seems that securing any additional loans will be difficult for the foreseeable future."
"Tch. This is troublesome."
As Chairman Park smacked his lips in frustration, Secretary-General Gil Seong-ho also spoke up, his face clouded with concern.
"I've looked into the situation myself, sir. But with the downgrades in credit ratings and the sharp rise in the exchange rate, even commercial banks are struggling to raise funds these days."
"No matter how bad the economy is, for cash to dry up like this... It looks like even more companies will start going under."
Chairman Park sighed, his voice heavy with worry.
At that, Seok-won, who had been quietly observing the conversation, glanced around and carefully asked,
"I heard we converted all our liabilities into long-term loans. Are we in a situation where we urgently need cash?"
"That's not it. It's just that, with the market atmosphere being so bleak these days, I wanted to secure some additional cash reserves. But the situation isn't making that easy."
Hearing that the group itself wasn't in trouble, Seok-won felt quietly relieved. A faint smile spread across his face as he spoke.
"If that's all it is, I think I can help with that."
"Hm?"
Chairman Park Tae-hong, cigarette still between his lips, turned to his second son with a puzzled look.
"And just how do you propose to do that?"
Without a word, Seok-won placed the file folder he had received earlier from Han Ji-sung on the table in front of his father.
"This is the profit statement from the funds you entrusted to me last time."
Chairman Park's eyes widened in surprise.
"Profit statement? You're saying you've already made enough gains to bring me this?"
"Yes, sir. It's all detailed inside. Please, have a look for yourself."
Seok-won flashed a confident smile.
Seok-won was not the type to make empty boasts. Seeing him this self-assured, Park Tae-hong was now certain the returns must be substantial.
With anticipation lighting up his face, Chairman Park hurriedly stubbed out his cigarette in the ashtray and grabbed the file folder.
He paused for a moment, closing his eyes as if saying a silent prayer—just like someone about to scratch off a lottery ticket—before flipping it open in one smooth motion.
As his eyes scanned the figures, Chairman Park drew in a sharp, audible breath.
"Hoooh!"