Korean banks are picking up investment in synthetic collateralized debt obligations, as they look to improve balance sheets for the approach of the Basel II accords. "Local banks want to increase their quality of assets," said a branch head at a European house in Seoul, noting the pick up in interest for investment-grade international CDO portfolios. He added, "Structured credit in Korea is very hot this year."
Credit officials noted local banking giants such as Shinhan Bank and Woori Bank have recently purchased CDO transactions. Officials at Shinhan and Woori declined comment.
