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The Effect of the Asian Financial Crisis on the Performance of Korean Nationwide Banks

Yongil Jeon and Stephen Miller ()
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Yongil Jeon: Central Michigan University

No 2002-32, Working papers from University of Connecticut, Department of Economics

Abstract: The Asian financial crisis spread its effect quickly across a number of countries. Korea faced serious problems in her financial and corporate sectors. This paper considers the performance of Korean nationwide banks before, during, and immediately after the Asian financial crisis. The performance of Korean nationwide banks took a big hit in 1998. Most banks recovered somewhat in 1999 with the notable exception of the further deterioration of Seoul. Several factors possess strong correlations with bank performance. Among other standard findings, equity to assets correlates positively with bank performance, even when the government recapitalized a number of institutions that performed poorly. The Asian crisis did not affect the normal rules of good bank management. The government, however, directly intervened in the banking sector on a large scale to limit the scope of the crisis in the Korean economy.

Keywords: Asian financial crisis; Korean commercial banks; profitability (search for similar items in EconPapers)
JEL-codes: G1 G2 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cfn, nep-com, nep-fin, nep-his, nep-ifn and nep-rmg
Date: 2002-05
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Published in Applied Financial Economics, March 2004

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