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The financial structure in transition : Financial liberalization and economic crisis in Korea

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  • The financial structure in transition
  • Hahm, Joon-Ho
  • Yonsei University


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Title The financial structure in transition
Similar Titles
Sub Title

Financial liberalization and economic crisis in Korea

Material Type Reports
Author(English)

Hahm, Joon-Ho

Publisher

[Seoul, South Korea]:Yonsei University

Date 2001-07
Series Title; No CIS Working Paper Series
Pages 23
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Subject Economy < Financial Policy
Holding Yonsei University

Abstract

While there have been numerous studies on the role of state-controlled finance in the development era, it is still poorly understood how the credit allocation mechanism has evolved throughout the recent period of financial liberalization in Korea. This paper focuses on the financing mechanism of the investment spree observed in the pre-crisis episode and finds that the corporate financing pattern in the 90s is characterized with two notable features: first, the rising volume of non-bank financial intermediary (NBFI) intermediated credits – both direct borrowings and the NBFI related direct financing such as commercial papers, and second, the increasingly shorter maturity structure of corporate debts – both domestic and foreign. Those features were in fact deeply related with the nature of financial liberalization policies undertaken and reflected distorted incentives based on implicit government guarantee. (The rest omitted)