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In Korea, the Thirst for Funds Drives Change

Author

Listed:
  • Hilton L. Root

    (Economic Strategy Institute, Washington, D.C., USA)

  • Mark Andrew Abdollahian

    (Decision Insights, Inc., USA)

  • Jacek Kugler

    (Claremont Graduate School, USA)

Abstract

It is widely acknowledged that Korea will not be secure against future economic crisis without structural reform of finance, enterprise and labor markets. Real reform requires a transfer of authority from the government to market-based institutions, forcing banks to take full responsibility for the loans they authorize. Before the crisis, the government implicitly insured depositors' bank loans made to the large conglomerates, leaving banks little incentive to develop the necessary skills in credit analysis and loan monitoring. The insured agents did not take proper care to manage their risks. Moral hazard or will increased government control over the financial sector weaken market discipline?

Suggested Citation

  • Hilton L. Root & Mark Andrew Abdollahian & Jacek Kugler, 2002. "In Korea, the Thirst for Funds Drives Change," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 5(01), pages 1-30.
    • Handle: RePEc:wsi:rpbfmp:v:05:y:2002:i:01:n:s0219091502000717
    DOI: 10.1142/S0219091502000717
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    Citations

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    Cited by:

    1. Victor Kane & Altay Dikeç & Jin Yong Park, 2017. "Cross-National CSR Web Reporting: A Comparative Analysis of Multinational Corporations in the U.S. and South Korea," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 20(01), pages 1-28, March.

    More about this item

    Keywords

    Economic crisis; Chaebol; Korea economy; Corporate governance; President Kim Dae Jung; Corporate restructuring; IMF;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • G3 - Financial Economics - - Corporate Finance and Governance

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