Two Approaches to Resolving Nonperforming Assets During Financial Crises

David Woo

No 2000/033, IMF Working Papers from International Monetary Fund

Abstract: The unprecedented rise in nonperforming assets during the recent Asian financial crisis severely tested the limit and capacity of the existing asset management infrastructure, leading policymakers to consider new approaches to resolve them. This paper examines two such approaches—the creation of asset management companies and the development of out-of-court centralized corporate debt workout frameworks—that came to define the core asset management setting in countries most seriously affected by the crisis. In addition to investigating their respective role, and evaluating their strengths and weaknesses, this paper seeks to benchmark some best practices in their design.

Keywords: WP; lead bank; AMC subsidiary; AMC board; AMC management; asset resolution process; foreign exchange; Nonperforming assets; asset management; debt workout; purchase assets; market value; roles of asset management companies; Asset management companies; Distressed assets; Loans; East Asia (search for similar items in EconPapers)
Pages: 41
Date: 2000-02-01
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Citations: View citations in EconPapers (15)

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