Korean banks' responses to the strengthening of capital adequacy requirements

Inwon Song

No 98-01, Pacific Basin Working Paper Series from Federal Reserve Bank of San Francisco

Abstract: The purpose of this paper is to examine Korean banks' responses to the Basle risk-weighted capital adequacy requirements implemented in 1993. The analysis indicates that while some cosmetic adjustments might have been made by partial recognition of unrealized stock losses and expected loan losses, efforts to increase capital in ways that effectively reduced risk exposure seemed to dominate the response to strengthened capital requirements. The analysis also suggests the advisability of supplementing risk-based capital requirements with leverage restrictions. The analysis also raises the question of whether the 8 percent minimum ratio of the Basle capital accord is sufficient for banks in developing countries.

Keywords: Banks and banking - Korea; Korea; Bank capital (search for similar items in EconPapers)
Date: 1998
New Economics Papers: this item is included in nep-ifn
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.frbsf.org/econrsrch/workingp/pbc/wppb98-01.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.frbsf.org/econrsrch/workingp/pbc/wppb98-01.pdf [301 Moved Permanently]--> https://www.frbsf.org/econrsrch/workingp/pbc/wppb98-01.pdf [301 Moved Permanently]--> https://www.frbsf.org/wp-content/uploads/wppb98-01.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:fip:fedfpb:98-01

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Pacific Basin Working Paper Series from Federal Reserve Bank of San Francisco Contact information at EDIRC.
Bibliographic data for series maintained by Federal Reserve Bank of San Francisco Research Library ().