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The month the Korean won collapsed in 2008 and the derivative "kiko" contracts sold by banks to Korean exporting companies
04/03/2009
Confusing derivative contracts sold by banks to exporters offer some protection against currency fluctuations but huge losses if the currency goes the other way. What happened in Detroit happened in S. Korea. The difference is that the Korean courts decision was that the contracts were confusing, the companies had no clear idea what they were getting into, and that it was designed to address a weakening dollar not a collapse of the won. The won went from 1000 to the dollar to 1500 to the dollar in 2008 during the global financial crisis of 2008. "Kiko" comes from the technical term banks used for "knock in, knock out" clauses in contracts. Obfuscation is defined as rendering something unintelligible, a practice used in these types of contracts in the period leading to the crisis.
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New York Times 04.03.2009
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