South Korea's determined use of securitization as a way to recover from the on-going effects of the 1997-1998 financial crisis is set to take advantage of another securitization technique: collateralized bond obligations.

The Ministry of Finance and Economy and the financial watchdog, the Financial Supervisory Service, recently announced a plan that will see many of Korea's smaller enterprises issue bonds that will be purchased by a fund set up with cash from local investment companies and banks, packaged into CBOs and sold on to local investors.

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