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"Did you say you are against it?"

When CEO Ko Young-il furrowed his brows and looked at him, he nodded without a moment's hesitation.

"Yes, that's correct."

"Well, this is surprising. I thought someone like you, who favors aggressive investments, would welcome this idea. I must say, I'm a bit taken aback."

It wasn't just a casual remark—Ko Young-il's face clearly showed his bewilderment.

"It's true that I pursue aggressive investments, but only after thorough analysis to ensure a strong probability of success. I don't just blindly throw money at something simply because it promises high returns."

Ko Young-il crossed his arms and listened with an open mind.

"At a glance, it may seem like investment finance companies (IFCs) are generating huge profits. But if you take a closer look, they're actually walking a tightrope over a steep cliff, engaging in highly precarious transactions to make money."

"What do you mean by that?"

Ko Young-il asked, his expression showing skepticism.

Seok-won leaned forward and, in a serious tone, explained the risks these companies were taking.

"As you know, the primary source of income for IFCs comes from borrowing short-term funds at low interest rates and lending them out as long-term loans with higher interest rates, profiting from the margin in between. This is known as the maturity mismatch strategy."

"But don't regular commercial banks operate in the same way?"

Ko Young-il pointed out. Seok-won nodded in agreement.

"Yes, they do. However, IFCs have gone a step further to maximize their profits by using a clever trick."

"...."

"They're securing funds through foreign currency borrowing."

"That makes sense, doesn't it? Borrowing in dollars from overseas is much cheaper than securing funds domestically."

Ko Young-il looked at him as if he didn't see the issue.

"Since IFCs rely on profiting from interest rate spreads, it's only logical for them to seek the lowest borrowing costs."

"You're absolutely right. As long as everything runs smoothly, IFCs can continue generating high returns without any issues."

Seok-won paused for a moment, then met Ko Young-il's gaze and continued.

"But what if an unforeseen event occurs, completely disrupting the flow of money that has been circulating in a positive cycle?"

"...!"

"In that instant, everything will collapse into chaos and disaster."

In fact, one of the biggest triggers of the IMF crisis was the reckless accumulation of short-term foreign debt by IFCs.

"I understand your concerns. But aren't you overestimating a risk that has an extremely low probability of occurring?"

Ko Young-il crossed one leg over the other as he spoke.

"Are you really going to give up just because you're afraid of a few maggots? The potential profits from IFCs and CP transactions are simply too great for that."

It was only natural for him to react this way—after all, he had no idea that the devastating IMF crisis was just around the corner.

Seok-won wanted to tell him that IFCs only had about two good years left, but doing so would mean bringing up the IMF crisis, which he couldn't explain. So instead, he could only suffer in silence.

"The most critical issue with IFCs is that the majority of their borrowed funds come from foreign debt in U.S. dollars."

"As I said earlier, isn't that simply because foreign interest rates are much lower than domestic ones? They're profiting from the rate differential, aren't they?"

"That's correct. But what happens if the cycle of positive returns is suddenly broken and, at the same time, the exchange rate spikes?"

Ko Young-il immediately grasped the implication, and his expression hardened.

"To repay their foreign debt, they need to convert Korean won into U.S. dollars. If the exchange rate surges, they could end up paying two or even three times the original amount they borrowed."

"I'm well aware of how dangerous dollar debt can be. But our country operates under a fixed exchange rate system, so what's there to worry about?"

Ko Young-il still seemed unfazed, responding with indifference.

At that time, South Korea had indeed adopted a managed floating exchange rate system.

Unlike a freely floating exchange rate system, where the market dictates currency fluctuations, the managed system allowed the central bank or government to intervene directly or indirectly to keep the exchange rate stable.

"IFCs are recklessly accumulating dollar debt because they believe this system will protect them."

Since the exchange rate wasn't expected to change, borrowing large amounts of foreign debt at low interest rates seemed like easy, risk-free profit—a foolproof business strategy.

"To me, it seems like you're overestimating the risk."

"That's not the case..."

Seok-won tried to explain further, but Ko Young-il raised a hand to cut him off.

"I understand your concerns. But let's end this discussion here."

It was an unsatisfying conclusion, but since Ko Young-il had made it clear that he didn't want to continue, there was no point in pushing further.

Feeling uneasy but resigned, Seok-won closed his mouth.

"You must have a lot to do. You should leave now."

"Yes, sir."

Seok-won got up and walked out of the room.

As the door closed, leaving him alone, CEO Ko Young-il glanced at the seat where Seok-won had just been sitting and clicked his tongue.

"This throws my plans off track..."

After much deliberation, Ko Young-il had come up with the idea of acquiring an investment finance company (IFC) as the key to taking Daehung Securities to the next level.

By bringing an IFC under its wing—one that could accept deposits like a bank, operate cash management accounts (CMAs), and issue commercial paper (CP)—the company could rapidly expand both in scale and profitability.

His grand vision was to establish Daehung Securities as a comprehensive financial firm, with Seok-won's PI (Principal Investment) division and the newly acquired IFC serving as its two main engines of growth.

If everything went according to plan, Daehung Securities would rise to the forefront of the industry, and Ko Young-il would secure his position as CEO for another term by proving his success.

With this in mind, he had already mapped out a rough master plan, shortlisted a few IFCs and finance companies for potential acquisition, and scheduled a presentation of his proposal to Chairman Park Tae-hong at the executive meeting next week.

"If Director Park had backed me, things would have gone much smoother… Damn."

It was an open secret within the group that Seok-won, as the chairman's second son, would eventually be given control of Daehung Securities as an independent entity.

On top of that, Chairman Park Tae-hong held Seok-won in high regard, making it all the more logical for Ko Young-il to first win him over to ensure a smoother execution of his plan.

However, to his surprise, the very person he had expected to support the idea had instead opposed it outright, bringing his plans to an abrupt halt before they could even begin.

"This is really problematic."

Ko Young-il crossed his arms, deep wrinkles forming on his forehead.

Even though Seok-won was technically just a department head, his background made it impossible to simply ignore him and push forward with the plan.

At the end of the day, Seok-won was highly likely to inherit Daehung Securities, and if Ko Young-il forced the acquisition despite his objections, their relationship would inevitably sour.

That was the best-case scenario. Worse, Seok-won might take it as a personal slight and hold a grudge against him.

Of course, based on what he knew of Seok-won's personality, he didn't seem like the type to dwell on resentment—but people could be unpredictable.

"Even if I succeed in carrying out the plan, there's no benefit if it costs me my future."

If their relationship turned sour, it would become difficult for him to maintain his ultimate goal: securing his position as CEO for the long run.

Seated on the sofa, Ko Young-il absentmindedly tapped the armrest, his expression heavy with contemplation.

"Still, this is too good of an opportunity to pass up."

No matter how much he thought about it, he couldn't bring himself to give up so easily.

Particularly, the issuance and sale of CP—practically a golden goose—was an unbelievably lucrative business. As long as the framework was in place, the profits would roll in effortlessly.

"Tsk. There's a pile of money lying right in front of me, and I can't even pick it up."

Ko Young-il muttered to himself, his face twisted in frustration.

As the company president, it was humiliating to have to tiptoe around a much younger executive, but unlike himself—a mere salaried CEO—Seok-won was part of the owner's direct lineage. There was no way around it.

"If I had known it would turn out like this, I shouldn't have brought it up in the first place."

He regretted it now, but what was done was done.

Besides, if he had pushed forward without mentioning it and then faced opposition from Seok-won when the plan was formally put into motion, things might have become even more complicated.

It was far better to gauge Seok-won's stance before reporting to Chairman Park Tae-hong and decide the next steps accordingly.

After repeatedly stroking his chin in contemplation, Ko Young-il finally made up his mind.

"It's unfortunate, but this isn't an urgent matter. There's nothing to gain from clashing with Director Park, so I should put this plan on hold for now."

Meanwhile, back in his private office, Seok-won sat at his desk with a grave expression, clenching both hands tightly.

"Of all things, why did he have to set his sights on an IFC?"

Although investment finance companies (IFCs) might currently appear to be golden geese generating massive profits, they were actually ticking time bombs poised to drag the Korean economy into disaster.

"The construction of the Mido Department Store's Gangnam branch—essentially built on loans—is already giving me a headache. If the IFC crisis explodes on top of that, the group won't be able to withstand the impact."

Of course, with Seok-won's wealth, he could easily cover any financial shortfall and prevent outright bankruptcy.

However, once the IMF crisis hit, the same funds could be used far more strategically and effectively. Wasting them on bailing out debt-ridden firms would be an enormous loss.

"Besides, as long as we don't acquire an IFC, there won't even be a need to spend that money."

If acquiring an IFC was the goal, it would be far wiser to wait until the IMF crisis drove prices into the ground and then selectively pick up the best assets at bargain prices.

"By then, the government will be covering bad debts, writing off liabilities, and essentially giving these companies away for next to nothing. Even if we proceed with an acquisition, there won't be any significant risks."

With the burdens stripped away and additional government support and incentives, acquiring an IFC under such conditions would create the kind of synergy Ko Young-il envisioned, elevating Daehung Securities to the next level.

Suddenly, a new thought flickered in Seok-won's mind.

"Why limit myself to an IFC? There's no reason I can't just acquire a commercial bank instead."

At the moment, the idea would sound absurd to most. However, during the chaos of the IMF crisis, U.S. hedge funds had indeed swooped in and acquired Korean banks at dirt-cheap prices.

These hedge funds then reaped enormous returns over the following years through dividends and stock sales, making several times their initial investment—sparking a long-lasting controversy.

But if foreign hedge funds could do it, there was no reason Daehung Securities—or rather, Seok-won himself—couldn't do the same.

"Should I actually give it a shot?"

What had initially been a passing thought now felt like a serious and highly plausible opportunity.

Wearing a contemplative expression, Seok-won began to delve deeper into the idea of acquiring a bank.