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The Role of Kamco in Resolving Nonperforming Loans in the Republic of Korea

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  • Mr. Dong He

Abstract

This paper aims to provide a balanced assessment of Korea Asset Management Corporation's role in resolving nonperforming loans in the aftermath of the 1997-98 financial crisis. It argues that KAMCO's incentive to dispose of NPLs can be explained by a strong social desire for a recovery of public funds injected for financial sector restructuring. KAMCO's market-making role also helped overcome informational and coordination problems in the development of a market for distressed assets.

Suggested Citation

  • Mr. Dong He, 2004. "The Role of Kamco in Resolving Nonperforming Loans in the Republic of Korea," IMF Working Papers 2004/172, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2004/172
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    References listed on IDEAS

    as
    1. Mr. Stefan N Ingves & Mr. Steven A. Seelig & Mr. Dong He, 2004. "Issues in the Establishment of Asset Management Companies," IMF Policy Discussion Papers 2004/003, International Monetary Fund.
    2. George Soros, 1999. "The International Financial Crisis," Challenge, Taylor & Francis Journals, vol. 42(2), pages 58-76, March.
    3. International Monetary Fund, 2003. "Republic of Korea: Selected Issues," IMF Staff Country Reports 2003/080, International Monetary Fund.
    4. He, Dong, 2003. "Budget Formulation and Implementation in Korea: A Macroeconomic Perspective," MPRA Paper 9756, University Library of Munich, Germany.
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    Cited by:

    1. Massimo Arnone & Alberto Costantiello & Angelo Leogrande & Syed Kafait Hussain Naqvi & Cosimo Magazzino, 2024. "Financial Stability and Innovation: The Role of Non-Performing Loans," FinTech, MDPI, vol. 3(4), pages 1-41, October.
    2. Nunn, Sharon, 2021. "Korea Asset Management Corporation (KAMCO): Resolution of Nonperforming Loans in South Korea," Journal of Financial Crises, Yale Program on Financial Stability (YPFS), vol. 3(2), pages 357-380, April.
    3. Metrick, Andrew, 2021. "Broad-Based Asset Management Programs," Journal of Financial Crises, Yale Program on Financial Stability (YPFS), vol. 3(2), pages 41-80, April.
    4. Nadège Jassaud & Mr. Kenneth H Kang, 2015. "A Strategy for Developing a Market for Nonperforming Loans in Italy," IMF Working Papers 2015/024, International Monetary Fund.
    5. Diego Valderrama, 2005. "Fiscal sustainability and contingent liabilities from recent credit expansions in South Korea and Thailand," Economic Review, Federal Reserve Bank of San Francisco, pages 29-41.
    6. Pasadilla, Gloria, 2005. "Special Purpose Vehicles and Insolvency Reforms in the Philippines," Discussion Papers DP 2005-06, Philippine Institute for Development Studies.
    7. Dimitris ANASTASIOU, 2022. "Management and Resolution Methods of Non-performing Loans: A Review of the Literature," Springer Books, in: Hachmi BEN AMEUR & Zied FTITI & Wael LOUHICHI & Jean-Luc PRIGENT (ed.), Crises and Uncertainty in the Economy, chapter 0, pages 187-201, Springer.
    8. Martin, Reiner & O’Brien, Edward & Peiris, M. Udara & Tsomocos, Dimitrios P., 2025. "Distressed assets and fiscal-monetary support: are AMCs a third way?," Working Paper Series 3023, European Central Bank.
    9. Byung S. Min, 2007. "Changing Pattern Of Corporate Governance And Financing In The Korean Chaebols," Economic Papers, The Economic Society of Australia, vol. 26(3), pages 211-230, September.
    10. Bholat, David & Lastra, Rosa & Markose, Sheri & Miglionico, Andrea & Sen, Kallol, 2016. "Non-performing loans: regulatory and accounting treatments of assets," Bank of England working papers 594, Bank of England.
    11. Liu, Wan-Chun & Hsu, Chen-Min, 2006. "The role of financial development in economic growth: The experiences of Taiwan, Korea, and Japan," Journal of Asian Economics, Elsevier, vol. 17(4), pages 667-690, October.
    12. Mr. Daniel C Hardy, 2013. "Bank Resolution Costs, Depositor Preference, and Asset Encumbrance," IMF Working Papers 2013/172, International Monetary Fund.

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