wallstreetturmoil Korea Advised to Forestall Recession

Global Credit Crisis Reaches Halfway Point

By Kim Jae-kyoung

Staff Reporter

The recent developments on the local financial market remind Koreans of the 1997-1998 financial crisis that swept through many Asian countries, with the local currency collapsing and the country's current account shortfall widening.

Growing fears of a massive foreign capital outflow are exacerbating investor sentiment, driving the currency market into chaos and thus fanning worries that the world's 13th largest economy may undergo another financial crisis.

A noted global consultant ruled out such a possibility, stressing that Korea will not face a crisis similar to the one it experienced in 1997-1998 as the situation today is totally different.

In an exclusive interview with The Korea Times, McKinsey and Company Asia Pacific Chairman Dominic Barton said that another crisis is unlikely as corporate debts remain manageable and foreign reserves are ample.

``We are in difficult situation but I don't think that we are in a big trouble yet and going toward a financial crisis. Now is very different from the 1997-1998 financial crisis as we have much less corporate debt and much more foreign reserves,'' he said.