EconPapers    
Economics at your fingertips  
 

Performance of Domestic and Foreign Banks: The Case of Korea and the Asian Financial Crisis

Yongil Jeon and Stephen Miller ()

Global Economic Review, 2005, vol. 34, issue 2, 145-165

Abstract: This paper examines the performance of banks, domestic and foreign, in Korea before and after the Asian financial crisis, examining how the profitability of those banks differed and identifying factors that explain why those differences existed. The performance of Korean banks deteriorated dramatically in 1998 with most banks recovering somewhat in 1999. Foreign banks did not experience the same negative effect on their performance as a rule. Overall, the domestic Korean banks suffered more severely from the Asian financial crisis than foreign banks. Several possible explanations exist. First, foreign banks, unlike domestic Korean banks, were not subject to credit allocation directives from the Korean government to selected, favoured industries. Second, foreign banks, since they relied for governance on the mother bank in the home country, achieved higher efficiency and better asset and liability management. Finally, foreign banks rely more heavily on fee-for-service income rather than loan revenue.

Keywords: Asian financial crisis; Korean commercial banks; profitability (search for similar items in EconPapers)
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16) Track citations by RSS feed

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/12265080500117491 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: The Performance of Domestic and Foreign Banks: The Case of Korea and the Asian Financial Crisis (2002) Downloads
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:taf:glecrv:v:34:y:2005:i:2:p:145-165

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RGER20

Access Statistics for this article

Global Economic Review is currently edited by Kap-Young Jeong and Taeyoon Sung

More articles in Global Economic Review from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().

 
Page updated 2019-11-08
Handle: RePEc:taf:glecrv:v:34:y:2005:i:2:p:145-165