WASHINGTON, D.C., December 22, 1998 ---
In its continuing effort to respond to the financial crisis in Korea, the International Finance Corporation signed agreements with Bank of America to establish a trade enhancement facility of US$100 million that will support trade finance to Korea. IFC will guarantee 40 percent of the US$100 million exposure taken by Bank of America.
The facility is a one year facility that can be renewed to accommodate a second year and will support Korean trade activity by broadening the availability of short-term trade finance. It will give selected Korean banks better access to letters of credit confirmations, and bankers acceptances; support trade between Korea and other markets; and increase the number of Korean banks with access to trade financing. IFC designed a similar trade enhancement facility in June 1998 with Sumitomo Bank.
IFC's guarantee will cover documentary credits originated by the following banks, which are expected to play a lead role in the revival of the country's banking sector: Kookmin Bank, Shinhan Bank, KorAm Bank, Hana Bank, and Housing and Commercial Bank.
IFC Vice President Mr. Assaad Jabre said the facility is part of a larger effort by the multilateral financial institutions to help Korea navigate the present financial crisis and bring about far-reaching and deep economic reforms. The facility is one of several projects that IFC is undertaking to build up Korea's financial sector and signals to the international community that the Corporation is strongly committed to Korea, he added.
After its merger with Nations Bank on September 1, 1998, Bank of America is the world's number one bank based on core capital of $47 billion. It is the largest US-based commercial bank with total assets of $595 billion. The bank has offices in 37 countries and conducts business in more than 190 countries.
IFC, part of the World Bank Group, fosters economic growth in the developing world by financing private sector investments, mobilizing capital in the international financial markets, and providing technical assistance and advice to governments and businesses.
