Experience of Crisis-Hit Asian Countries: Do Asset Management Companies Increase Moral Hazard?

Gloria Pasadilla and Akiko Terada-Hagiwara

No RPS 2005-01, Research Paper Series from Philippine Institute for Development Studies

Abstract: This paper examines the performances of Asian asset management companies (AMCs). The analysis reveals that the AMCs vary significantly in their design and performances. The authors claim that AMCs can trigger moral hazard-inspired bank lending, especially when the mode of transfer of nonperforming loans (NPLs) from banks to AMCs entails little cost to banks. The new centralized AMC, the Thai Asset Management Company (TAMC), on the other hand, decreased the new NPL ratio, suggesting that TAMC provokes no adverse moral hazard effect on financial institutions. In addition, they find that the same institutional consideration significantly decreases new NPL in foreign banks and finance companies.

Keywords: Asian financial crisis; bank restructuring; asset management company (AMC); Thailand; moral hazard; nonperforming loans (NPLs) (search for similar items in EconPapers)
Pages: 41
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.pids.gov.ph/publication/research-paper ... ncrease-moral-hazard (application/pdf)

Related works:
Working Paper: Experience of Crisis-Hit Asian Countries: Do Asset Management Companies Increase Moral Hazard? (2004)
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:phd:rpseri:rps_2005-01

Access Statistics for this paper

More papers in Research Paper Series from Philippine Institute for Development Studies Contact information at EDIRC.
Bibliographic data for series maintained by Michael Ralph M. Abrigo ().