The Korean Financial Crisis of 1997 : Onset, Turnaround, and Thereafter

This book chronicles how Korea dealt with and overcame the crisis over time. The book is organized into eleven chapters. Chapter one outlines the troubling financial market conditions at home and abroad before the crisis. Chapter two then delves into the origin of the crisis and offers analyses on the shortcomings of the Korean economy and the instability of the international financial system. In chapter three, policy measures the government executed in the wake of the onset of the crisis are described and analyzed. Chapter four probes the steps taken to reduce the risk of sovereign insolvency in the face of the cool market reaction to the initial package of crisis response measures announced by the International Monetary Fund in December 1997. Chapter five describes the background within which the government established the institutional framework necessary for corporate, financial, and labor market restructuring between December 1997 and April 1998. The government efforts to secure additional foreign currency liquidity through the markets and to devise initiatives to counter the massive unemployment are discussed in detail. In chapter six, the situation during May and June 1998 is explored with a focus on the closure of nonviable corporate and financial companies and the efforts to drive down interest rates and revive credit flows. This is followed, in chapter seven, by an analysis of the first phase of financial sector restructuring, which started in the third quarter of 1998, and the measures adopted to shore up potential growth and cope with the pressing problem of unemployment. Chapters eight and nine deal separately with the restructuring of the top five chaebols (the large family-controlled and family-run groups that dominate business in Korea), the economic stimulus packages applied during the fourth quarter of 1998, the efforts to restore financial market stability and economic growth, and the initial phase of foreign exchange liberalization measures, which were implemented during the first half of 1999. Chapter ten then discusses the situation during the second half of 1999, with a particular focus on the collapse of the Daewoo business group, including the steps taken to contain the resulting fallout, as well as measures aimed at expanding the economic recovery. Chapter eleven, the final chapter, offers a diagnosis of the Korean economy, along with an analysis of the policy implications and the responses for the future.

Bibliographic Details

Main Author:	Lee, Kyu-Sung
Language:	English
Published:	World Bank 2011
Subjects:	ACCOUNTING, ACCOUNTING STANDARDS, ALLOCATION OF CAPITAL, ASSET MANAGEMENT, ASSUMPTION OF LIABILITIES, AVAILABILITY OF CREDIT, BALANCE OF PAYMENTS, BALANCE SHEETS, BANK BRANCHES, BANK LENDING, BANK SPREAD, BANK SUPERVISION, BANKRUPTCIES, BANKRUPTCY, BASIS POINTS, BENCHMARK STOCK, BENEFICIARY, BIDS, BOND FUNDS, BOND MARKETS, BOND YIELD, BOND YIELDS, BROKERAGE, CAPITAL ACCOUNT, CAPITAL FLOW, CAPITAL INFLOWS, CAPITAL MARKET, CAPITAL MARKET LIBERALIZATION, CAPITAL MARKETS, CASH FLOW, CASH HOLDINGS, CENTRAL BANK, CENTRAL BANKS, CHECKING ACCOUNTS, COMMERCIAL BANK, COMMERCIAL BANKS, COMMERCIAL PAPER, CORPORATE BOND, CORPORATE BOND ISSUES, CORPORATE BOND MARKETS, CORPORATE BONDS, CORPORATE CREDIT RISKS, CORPORATE GOVERNANCE, CREDIT ACCESS, CREDIT FLOWS, CREDIT GUARANTEE, CREDIT GUARANTEES, CREDIT LINE, CREDIT MARKETS, CREDIT RATING, CREDIT RATINGS, CREDIT-RATING AGENCIES, CREDITOR, CREDITOR BANK, CREDITOR BANKS, CREDITORS, CREDITWORTHINESS, CRISIS COUNTRIES, CURRENCY CRISIS, CURRENCY DEPRECIATION, CURRENT ACCOUNT DEFICIT, CURRENT ACCOUNT DEFICITS, DEBT COMPOSITION, DEBT ISSUES, DEBT PAYMENT, DEBT PAYMENTS, DEBT SECURITIES, DEBTS, DEFAULTS, DEPOSIT, DEPOSIT INSURANCE, DEPOSITORS, DEPOSITS, DEVELOPMENT BANK, DISBURSEMENT, DOMESTIC BANKS, DOMESTIC BOND, DOMESTIC BOND MARKETS, ECONOMIC CONDITIONS, ECONOMIC LIBERALIZATION, ECONOMIC POLICIES, EMERGING MARKET, EMERGING MARKET COUNTRIES, EQUITY FUNDS, EQUITY INVESTMENTS, EQUITY ISSUES, EQUITY MARKETS, EXCESS SUPPLY, EXCHANGE RATES, EXPENDITURES, EXPORTERS, EXTERNAL DEBT, FINANCIAL CRISES, FINANCIAL CRISIS, FINANCIAL MARKET, FINANCIAL MARKETS, FINANCIAL RESTRUCTURING, FINANCIAL STABILITY, FINANCIAL STATEMENT, FINANCIAL STRUCTURES, FINANCIAL SUPPORT, FLOATING RATE, FOREIGN CAPITAL, FOREIGN CURRENCIES, FOREIGN CURRENCY, FOREIGN DEBT, FOREIGN DIRECT INVESTMENT, FOREIGN EXCHANGE, FOREIGN EXCHANGE MARKET, FOREIGN EXCHANGE MARKETS, FOREIGN EXCHANGE RESERVES, FOREIGN EXCHANGE TRANSACTIONS, FOREIGN INVESTMENT, FOREIGN INVESTORS, FOREIGN LENDERS, FOREIGN MARKETS, FORWARD MARKET, FORWARD MARKETS, GLOBAL BOND, GLOBAL BONDS, GLOBALIZATION, GOVERNMENT GUARANTEES, GOVERNMENT POLICY, GOVERNMENT REGULATIONS, GOVERNMENT SUPPORT, GRACE PERIOD, GROSS DOMESTIC PRODUCT, GUARANTEE FUND, HEDGE FUND, HEDGE FUNDS, HOLDING, INFLATION, INFLATIONARY PRESSURES, INFORMATION TECHNOLOGY, INSTRUMENT, INSURANCE CORPORATION, INTEREST RATE SPREAD, INTEREST RATES, INTERNATIONAL BANK, INTERNATIONAL BANKING, INTERNATIONAL FINANCIAL INSTITUTIONS, INTERNATIONAL FINANCIAL MARKETS, INTERNATIONAL FINANCIAL SYSTEM, INTERNATIONAL INVESTMENT, INTERNATIONAL SETTLEMENTS, INVENTORIES, INVESTMENT CAPITAL, INVESTOR CONFIDENCE, INVESTOR REDEMPTION, LABOR MARKET, LENDERS, LINE OF CREDIT, LINES OF CREDIT, LIQUIDITY, LOCAL CURRENCY, LOCAL LENDERS, LONG-TERM CAPITAL, LONG-TERM INVESTMENT, LONG-TERM LOANS, LOSS OF CONFIDENCE, MACROECONOMIC STABILITY, MARKET CONDITIONS, MARKET CONFIDENCE, MARKET INTEGRATION, MARKET INTEREST RATES, MARKET SHARES, MARKET STABILITY, MATURITY, MINORITY SHAREHOLDERS, MONETARY AUTHORITIES, MONETARY FUND, NET DEBT, NONPERFORMING LOAN, NONPERFORMING LOANS, OUTSTANDING LOANS, OVERSEAS DEBT, PAYMENT OBLIGATIONS, POLICY RESPONSES, PORTFOLIO, PRUDENTIAL REGULATIONS, PUBLIC FUNDS, REAL EXCHANGE RATE, REAL INTEREST, REAL INTEREST RATE, REDEMPTION DEMAND, REPAYMENT, REPAYMENTS, RESERVE, RESERVES, RETURN, RULE OF LAW, SAFETY NET, SAMURAI BOND, SECURITIES, SECURITIES DEALERS, SETTLEMENT, SHORT-TERM BORROWING, SHORT-TERM EXTERNAL DEBT, SHORT-TERM LIQUIDITY, SMALL INVESTORS, SOVEREIGN RATING, SOVEREIGN RATINGS, SPOT MARKET, STOCK MARKET, STOCK MARKETS, STOCKS, SUBSIDIARY, SUPERVISORY AUTHORITIES, SUPERVISORY AUTHORITY, SWAP, TAX, TAX COLLECTION, TRADE BALANCE, TRADE UNIONS, TRADING, TRANSPARENCY, TREASURY, TREASURY BONDS, TREASURY YIELDS,
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000356161_20110408052735 https://hdl.handle.net/10986/2280
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