Korean Stock Prices Hit 10-Year Low

Plans for an international bailout of South Korea’s troubled economy failed to break the market’s fall Monday, as the country’s key stock index plummeted to its lowest point in a decade.

Angry South Korean investors demanded a halt in market trading as prices kept falling.

“They vented their anger by shouting demands and insults,” said an official at one securities firm, Dongsuh, speaking on condition of anonymity.

While Seoul’s request for a rescue package from the International Monetary Fund is expected to help ease South Korea’s financial crisis, investors fear it could force more companies into bankruptcy.

In New York, meanwhile, the nation’s central bank chief, Kyung Shik Lee, predicted the nation would need $20 billion to $50 billion in the bailout package expected to be fashioned by the IMF. He said it would likely take three weeks to negotiate the plan.

In a speech at the Asia Society, Lee sought to reassure investors that the nation was undertaking reforms to restore its economy to health. He said the “worst of the situation is almost over” for big conglomerates, some of which were forced into bankruptcy this year.

“Now that ‘too-big-to-fail’ has turned out to be an empty promise, the (conglomerates’) management style has begun to show a big improvement,” said Lee, governor of the Bank of Korea.

He sought to portray the Korean economy - the world’s 11th largest - as basically sound enough to overcome its ills.

“Nowadays the Korean economy faces a very difficult situation,” he said. “But there is every reason to expect it to recover its dynamism within one or two years at most.”

IMF loans usually come with strict conditions attached, including cleaning up debt-ridden companies and tightening government spending. Those measures are expected to result in mass layoffs, something unheard of in South Korea.