Korea Debt Crisis Is a Cautionary Tale as Era of Easy Money Ends

Sitting in a lake teeming with wildlife, several hours by train from Seoul, Korea’s Legoland is an unlikely poster child for the global struggle to fight inflation while maintaining financial stability.

But a default on 205 billion won ($155 million) worth of debt by the theme park’s developer triggered the worst meltdown in South Korea’s 1,690 trillion won credit market since the global financial crisis. And as interest-rate hikes batter real estate markets around the world, it’s a reminder that even relatively safer financial systems like Korea’s — labeled “resilient” earlier this year by the International Monetary Fund ...