In Brief: European Plan for Korea Said to Please U.S. Banks

U.S. bankers are favorably disposed to a European plan to help South Korea resolve its short-term debt problems, according to U.S. banking sources familiar with negotiations.

One source said French bank Societe Generale proposed converting some outstanding South Korean debt into floating-rate notes after that debt is rolled over.

This plan is seen as an alternative to an earlier proposal by J.P. Morgan & Co. that the South Korean government issue new bonds to retire outstanding private sector debt.

That J.P. Morgan plan is now "off the table," the U.S. banking source confirmed Friday.

Speaking on condition that he not be identified further, the source also said German banks meeting earlier Friday in Frankfurt had agreed to a joint approach toward South Korea.

International bankers were in meetings Friday in New York, at the headquarters of Citibank.