Endless arbitrage?

In March 2007, the spread between the interest rate component on a dollar/Korean won cross-currency swap (CCS) and a vanilla domestic interest rate swap (IRS) was just 20-40 basis points. In mid-April 2008, after widening to as much as 500bp in November, the spread remains huge, at around 400bp. Experts say the development is indicative of a liquidity crisis in the South Korean market. At the same time, it presents an arbitrage opportunity for investors.

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AsiaRisk - Korea Basis Arb May 2008.pdf96.14 KB

What did I say then?

Hang Seng Bank deal runs aground | FT

Advanced plans by Hang Seng Bank to take a significant equity stake in Minsheng Bank, China's largest privately owned bank, appear to have fallen through, leaving the mainland group open to approaches from other foreign suitors, industry executives said.....

It was intending to take an 8 per cent equity stake in Minsheng, possibly making it the single largest shareholder.....