Can't change - won't change

"We have to rebuild our credibility with the international market," says Lee Hun-jai, one of the last scions of Korea's ancient monarchy, and as chairman of the recently formed Financial Services Commission the man in the hottest seat in Korea's battle to stabilize its economy. "To do that we have to go through the 'paradox of credit transparency'. That means our problems will be disclosed and foreign investors may not want to do business with us. But if we keep our existing system no one will be convinced of any changes."

So far, despite some encouraging signs - the recovery in the Korean won since the turn of the year, surges in the country's foreign reserves and a large current-account surplus - Korea is doing a poor job of convincing foreign investors that its system can change. Corporate debt is increasing and profits are...