The Korean Financial Crisis of 1997—A Strategy of Financial Sector Reform

Angel Ubide and Tomás Baliño

No 1999/028, IMF Working Papers from International Monetary Fund

Abstract: After years of strong performance, Korea’s economy entered a crisis in 1997, owing largely to structural problems in its financial and corporate sectors. These problems emerged in the second half of that year, when the capital inflows that had helped finance Korea’s growth were reversed, as foreign investors—reeling from losses in other Southeast Asian economies—decided to reduce their exposure to Korea. This paper focuses on the sources of the crisis that originated in the financial sector, the measures taken to deal with it, and the evolution of key banking and financial variables in its aftermath.

Keywords: WP; HSBC Holdings; financial system; capital adequacy ratio; equity capital; exchange rate; Financial crises; prudential regulations; banking supervision; public funds; commercial paper; subordinated debt; capital base; excess reserves; development bank; bond issue; book value; form bank; short-term debt; Commercial banks; Loans; Nonperforming loans; Bank credit; Credit; Southeast Asia; East Asia (search for similar items in EconPapers)
Pages: 66
Date: 1999-03-01
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