South Korea's factory activity shrank for a sixth consecutive month in December, a business survey showed on Monday, as the global economic downturn and a local truckers' strike led to the worst slump in demand in 2-1/2 years, Reuters reported. The S&P Global purchasing managers' index (PMI) for South Korea manufacturers fell to a seasonally-adjusted 48.2 last month from 49.0 in November.

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, Bloomberg News reported.

Rate hikes by the US Federal Reserve are significantly increasing the cost of capital for South Korea’s startups, elevating the chance many may face bankruptcy in coming months, according to the nation’s Minister for SMEs and Startups, Bloomberg News reported. “US rate increases are too fast and too violent and we are puzzled,” Lee Young said in an interview in Seoul.

South Korea should avoid following Japan’s lead of using fiscal and monetary stimulus to combat the challenges of an aging economy, central bank Governor Rhee Chang-yong said, urging reforms instead to boost fertility, Bloomberg News reported. Aging is a rising concern in the developed world and Korea is among the hardest-hit together with Japan. South Korea shattered its own record for the world’s lowest fertility rate last year, adding to long-term pressure on policy makers to keep interest rates low and fiscal stimulus ample to boost growth.

Korean consumers were misled by some of the nation’s biggest financial firms and should get back the money they lost when a German property fund collapsed, South Korea’s financial watchdog recommended Tuesday, Bloomberg News reported. The six firms -- Shinhan Securities Co., NH Investment & Securities Co., Hana Bank, Woori Bank, Hyundai Motor Securities Co. and SK Securities Co. -- should repay the 430 billion won ($317 million) clients lost, a panel at Financial Supervisory Service said.

The meltdown of FTX has triggered a chain reaction in Korea's cryptocurrency-linked stocks, which saw their values plummet on the first trading day after one of the world's largest crypto exchanges filed for bankruptcy, the Korea Times reported. Shares of Com2uS, a game developer which listed its C2X token on the exchange in March, suffered a double-digit decline on Monday, dipping to a new eight-year low. Com2uS shares closed Monday at 61,900 won, down 14.74 percent, from the previous trading day. Other crypto-related stocks in Korea also went on a losing streak on the same day.

South Korea’s five major financial holding companies pledged a total of 95 trillion won ($67 billion) by the end of this year to help stabilize the credit market, responding to a request of the regulator, Bloomberg News reported. The heads of KB Financial Group Inc., Hana Financial Group Inc., Shinhan Financial Group Co., Woori Financial Group Inc. and NongHyup Financial Group Inc. made the commitment when they met with Financial Services Commission Chairman Kim Joo-hyun, the regulator said in a statement on Tuesday.

Past financial crises are haunting South Korean policy makers as they rush to support a local credit market that’s quickly gone from one of the world’s safest to teetering on the brink, Bloomberg News reported. As Korea gets swept into a global debt market rout, corporate treasurers and market regulators in Seoul are staring down one of the most rapid deteriorations in the nation’s credit market ever. The rout is one of the worst in Asia’s local-currency markets amid a broader fixed-income slump this year.

South Korean assets rallied on Monday after the government pledged at least 50 trillion won ($34.8 billion) to prop up credit markets, easing concerns about rising default risks in key sectors including real estate, Bloomberg News reported. The Kospi index advanced as much as 2%, with shares of brokerages and builders such as Kiwoom Securities Co., Meritz Securities Co. and Dongbu Corp. notching up gains. Government bonds rose across the curve while the won jumped as much as 0.8% against the dollar before paring its rise.

Domestic builders are facing growing concerns over the possibility of a series of bankruptcies amid worsening investor sentiment in the wake of the recent slump in the real estate market, according to industry officials on Thursday, the Korea Times reported. Late last month, Wooseok Construction, a medium-sized builder based in South Chungcheong Province, failed to repay its debt in time. If the company fails to make the payment again, it will be forced into bankruptcy.