It would be comforting to portray the intense and speedy negotiations by which international commercial banks and Korean government officials staved off a default in that country as the turning point in the Asian crisis [see cover story, this issue: Korea stares into the abyss]. Indeed, there was much to note and praise in that effort, not least the way in which certain of the largest American banks lived up to the best traditions of leadership in such debt crises.
The US treasury, too, eventually played its hand well, identifying the crisis and forcing the G7 central banks to head it off. So, the US treasury recovered a position which it and the IMF had badly fumbled back in November, when they had wrongly assumed that the original $57 billion official aid package agreed for Korea would permit the country quickly to resume financing in the international bond markets. It didn't. And make no mistake: Korea was on the brink last Christmas Eve.
Even today, should the agreement that has been hammered out between Korea and the 13 international banks somehow unravel, there is simply not enough foreign currency available in Korea to pay back the debts of its banks originally falling due in the first half of this year.