Financial Liberalization and the Evolution of Banking and Financial Risks The Case of South Korea

Panicos Demetriades, Bassam Fattouh and Kalvinder Shields

No 01/1, Discussion Papers in Economics from Division of Economics, School of Business, University of Leicester

Abstract: The paper provides new insights into the role of financial liberalization in the South Korean financial crisis using a number of novel approaches. Firstly, primary information regarding the relaxation of financial restraints, such as interest rate ceilings, capital controls and reserve requirements, is collected and summarised. Secondly, this information is used to construct summary measures of financial liberalization. Thirdly, qualitative information on the role of financial liberalization in the financial crisis is presented from a new survey of 44 IMF, World Bank and Korean officials who had direct exposure to the events surrounding the financial crisis. Fourthly, the effects of financial liberalization on the evolution of banking and financial risks are estimated utilising a conditional CAPM with time-varying market risk. Finally, qualitative and quantitative findings are juxtaposed, allowing insights into the extent to which financial markets recognized the increased banking and financial risks, which emanated from financial liberalization.

Keywords: Financial liberalization; financial crisis; banking and financial risks (search for similar items in EconPapers)
JEL-codes: E44 F34 G12 G28 (search for similar items in EconPapers)
Date: 2001-01
References: View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.le.ac.uk/economics/research/RePEc/lec/leecon/econ01-1.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lec:leecon:01/1

Ordering information: This working paper can be ordered from
https://www2.le.ac.u ... -1/discussion-papers

Access Statistics for this paper

More papers in Discussion Papers in Economics from Division of Economics, School of Business, University of Leicester School of Business, University of Leicester, University Road. Leicester. LE1 7RH. UK Provider-Homepage: https://le.ac.uk/school-of-business. Contact information at EDIRC.
Bibliographic data for series maintained by Abbie Sleath ().