A few days later.
Team Leader Han set foot on Korean soil after a long time.
Originally, I planned to call him back after the subprime mortgage crisis ended, but because of the KIKO situation, it was brought forward a bit.
"I'm sorry to call you back to Korea during such a busy time."
"No, thanks to experts like Rajan, a lot of work has been reduced. Because they've been
analyzing data nonstop, I've even been able to leave work on time lately."
I met Team Leader Han in Captain Kang's office.
His face had definitely improved a lot.
When I saw him in the U.S., he looked more like a mummy or a zombie than a person, but now his complexion had returned.
"The U.S. real estate bubble won't burst immediately, but there's something interesting I need you to do in the meantime."
"If it's something the boss asks, I'm ready to work diligently on it. Especially if it's work in
Korea, I'll put in even more effort."
"Remember, I promised? Once the subprime mortgage crisis is over, you'll be sitting in the CEO seat of Taewoo Securities."
"Of course I remember! That promise is what's kept me from dying of overwork so far."
Team Leader Han's eyes were burning with determination.
He was strongly resolved to return to Taewoo Securities, which he considered his hometown.
"To return to Taewoo Securities, you still need to make a name for yourself in the Korean
financial industry, right?"
"If you give me the chance, I'll definitely make a name for myself."
"I hear the Korean financial industry is selling KIKO derivatives — targeting Korean small and medium export companies."
Team Leader Han gave a bitter laugh.
He had sold KIKO products directly to Japanese companies and knew well how those companies had suffered, so his laugh was one of disbelief.
"Ha! You mean the derivatives we sold in Japan? That's practically gambling. Banks that
prioritize stability shouldn't be touching that product."
"Wall Street sells subprime derivatives too. Do you think Korea would be any different?"
"That's true. I momentarily forgot that banks are ultimately places that deal in money, and if
there's profit to be made, they don't really care if others get hurt."
Team Leader Han had worked longer on Wall Street than at Taewoo Securities.
Because he knew well how ruthless and heartless the financial world could be, he quickly
understood the current situation.
"Aren't we the ones who first created and sold the KIKO product? So, we have to clean up the mess ourselves, right?"
"How do you suggest we handle the cleanup?"
"I'll give you the list of small business owners who bought the KIKO product. Go meet them and pressure the banks to release KIKO-related insurance products."
"So, you're saying the banks should be held accountable too."
KIKO was a kind of currency speculation product.
Depending on the won-dollar exchange rate, subscribers would either make a profit or suffer a loss.
In the process, the banks merely took a cut as intermediaries—like a third party.
But if insurance products related to KIKO were introduced?
If the exchange rate soared, the banks would have to pay huge insurance claims to the
subscribers.
Simply put,
Currently, the banks are positioned as dealers.
But the moment insurance products are launched, they would fall from dealer to gambler.
Dealers don't care who wins or loses in gambling, but once they become gamblers, they can only be winners or losers.
"Isn't it time for Korean finance to get a taste of advanced financial techniques?"
"We'll give them exactly the kind of taste they learned on Wall Street. And since we created
KIKO, we know exactly how to attack it."
"There will soon be a meeting with small and medium enterprises affiliated with Taewoo Group. I'll invite you as a special speaker. Make sure you put your plan into action."
"I'll report good news soon."
Team Leader Han was confident.
It wasn't arrogance.
He was the very person who first created the KIKO derivative product and had already applied it several times, so his confidence was well-founded.
The meeting was held swiftly.
Many representatives from small and medium-sized enterprises attended the meeting held at
Taewoo Group's headquarters.
I delivered the opening remarks, emphasizing the importance of this gathering.
Of course, after the opening speech, I stepped back and left the rest of the work to Team Leader Han.
About four hours later,
I received a call from Team Leader Han telling me that the meeting had concluded, and we met at Captain Kang's office, each arriving in our own cars.
"How did it go? Were you able to persuade the small business owners?"
"It wasn't easy. I explained the risks of KIKO thoroughly, but they were hesitant about the costs involved in signing up for the insurance product."
"So, what did you do?"
"I made a proposal. I agreed to cover the entire cost of joining the insurance product and the
monthly premiums. In return, I negotiated to take 60% of the premiums collected."
As expected from Team Leader Han.
Without my intervention or advice, he found a way.
His capabilities were excellent, and having worked with me for a long time, he understood
exactly how I wanted things done.
"We'll be holding a few more meetings. Convince them all to sign up for the insurance."
"Since I'm covering all the costs, getting them to subscribe isn't difficult, but the insurance
product must be launched by the banks before anyone can sign up."
"Why would the banks refuse? If they create an insurance product, hundreds of small business owners will willingly subscribe."
"True. They made a KIKO derivative product just to earn commissions. If there's more money to be made from insurance premiums, they'd probably create new insurance products overnight."
Now it was time for the banks to step off the dealer's chair and join the gamblers.
Once Team Leader Han took the lead, banks would easily descend from dealers to gamblers.
The only question left was how high the stakes would be set.
If the banks got too greedy?
It would be a repeat of what happened during the subprime mortgage crisis, where Wall Street's investment banks collapsed.
***
VIP lounge, Shinwha Bank headquarters.
Team Leader Han sat comfortably on a sofa, conversing with Deputy Head Jung Tae-seop of
Shinwha Bank.
"You worked at Taewoo Securities and then about ten years at a Wall Street investment firm.
What brings you here to see me?"
He was a very important figure—the deputy head of a bank—second only to the bank president, holding immense power.
Responsible for developing financial products and overseeing actual business operations, meeting such a person was no easy feat.
However, Team Leader Han had considerable experience too.
Having served as an executive at a Wall Street investment firm, he easily arranged this meeting.
"A banker from Wall Street talking business—this definitely piques my interest."
"I heard your bank is selling KIKO derivatives. But I don't understand why there's no insurance product related to KIKO."
"Insurance for a derivative product? Hmm, it's not impossible to create, but who would sign up for that?"
Deputy Head Jung scoffed.
He'd reluctantly made time for someone who claimed to have learned advanced financial
techniques on Wall Street, only to hear about insurance for derivatives.
Of course, if they could sell it, all the better—double commissions.
But who would actually buy such insurance?
Even selling fire insurance required begging.
"I don't just talk. I brought consent forms signed by small business owners who purchased KIKO products from Shinwha Bank. They all agreed to sign up if Shinwha Bank launches KIKO insurance."
"...Is that so?"
Team Leader Han pulled out numerous consent forms from his bag.
Deputy Head Jung's lips curled up slightly as he looked over them.
"Very well! Let's aim to launch the KIKO insurance product within this week."
"You speak very clearly. To help with the launch, I've prepared a draft for the insurance product."
Team Leader Han handed over the draft.
Its main points were:
1. A 3-year insurance contract.
2. If the exchange rate rises more than 60% from now, the insurance pays out 10 times the
amount of the KIKO derivative product.
3. In return, the policyholder pays a monthly premium of 3% of the KIKO derivative amount.
"Hmm, paying out ten times sounds a bit risky."
"But the monthly premium is 3%! I understand Shinwha Bank sold about 500 billion won worth of KIKO products. That means a monthly premium income of 15 billion won. To earn that level of premium income, the payout has to be about 10 times, doesn't it?"
A monthly profit of 15 billion won.
The deputy head licked his lips.
It was certainly a tempting amount.
"Still, paying out ten times the amount is a bit much."
"The exchange rate must rise by 60% for the insurance conditions to kick in. Do you really
expect that to happen?"
"The won-dollar exchange rate has already stabilized. I believe it will either stay steady or even decline rather than rise. And a 60% rise? That's impossible unless the IMF crisis returns."
"Then why hesitate? Where else can you find a safer product with such huge potential returns?"
The deputy head felt a strange familiarity.
He was hearing the same argument they had used when selling the KIKO derivatives to small
businesses.
"I'll discuss this with my staff and get back to you."
"One more thing. If the insurance product isn't launched under these terms, all the companies I represent as an agent will demand refunds or cancel their KIKO derivative contracts."
"W-what...?"
Five hundred billion won worth of contracts being refunded at once?
That could seriously damage Deputy Head Jung's career, as he was aiming for the bank
presidency.
"Why are you going this far?"
"I don't want much. Just give me 1% of the insurance premiums as my commission. Isn't that a fair deal?"
"Ha."
Deputy Head Jung Tae-seop smiled.
They say the Wall Street guys are nothing but hyenas.
In the end, this guy was just looking out for his own profit, fleecing small business owners.
That was actually a relief.
If he was doing this as a broker rather than with some other hidden agenda, it was
understandable.
"I will do my best to launch the insurance product based on your draft."
"Thank you! And if I come up with any new products later, I'll be sure to contact you first."
"Hmm, there's no need to come find me personally. I'll have my team handle it. Communication will be faster that way."
Han extended his hand.
But Deputy Head Jung ignored it and stood up.
He didn't want to shake hands with a hyena that was preying on small business owners.
Watching this, Han smiled inwardly.
Who's really looking down on whom now?
Let's see how long that high-and-mighty attitude lasts.
Still smiling, Han stood and walked out.
He lingered for a moment, staring at Jung Tae-seop's figure by the window,
almost as if memorizing his prey.