Calyon was recently appointed a market maker for the nascent Koribor floating rate benchmark and the bank expects trading in products referenced to the rate to take off next year. "As Korea is looking to become a more important financial hub we need more floating rate tools," said Gin Lee, treasurer and Korean head of capital markets at the French bank in Seoul.
Earlier this summer the Korean market launched Koribor to replace the three-month C.D. rate as the domestic benchmark (DW, 7/21/03). Other market markers include Citigroup, HSBC and Kookmin.
Lee thinks the floating interest rate will speed up product development and create a deeper market in exotic instruments, such as interest rate options and constant maturity swaps.
