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http://ssrn.com/abstract=1241021
 
 

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Micro-Level Evidence on the Role of Moral Hazard in the Asian Financial Crisis: Analysis of Malasya, Philippines, Korea and Thailand


Adam Honig


Amherst College - Department of Economics

Sonali Jain-Chandra


Columbia University - Graduate School of Arts and Sciences - Department of Economics

August 20, 2008

Applied Econometrics and International Development, Vol. 6, No. 1, 2006

Abstract:     
This article examines the role of government guarantees to domestic banks in generating moral hazard in pre-crisis East Asian economies. We test for moral hazard among bank creditors by determining whether protected banks received more funds from creditors than otherwise identical banks that did not enjoy such guarantees. In order to determine empirically the existence of moral hazard among bank managers, we examine whether managers of protected banks assumed more risk than their counterparts at non-protected banks. Using micro-level data, we find strong evidence of moral hazard among bank managers and limited evidence of moral hazard among bank creditors

Number of Pages in PDF File: 12

Keywords: Moral hazard, Asian financial crisis

JEL Classification: C23, E44, E53, E58, F34, G21

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Date posted: August 22, 2008  

Suggested Citation

Honig, Adam and Jain-Chandra, Sonali, Micro-Level Evidence on the Role of Moral Hazard in the Asian Financial Crisis: Analysis of Malasya, Philippines, Korea and Thailand (August 20, 2008). Applied Econometrics and International Development, Vol. 6, No. 1, 2006. Available at SSRN: http://ssrn.com/abstract=1241021

Contact Information

Adam Honig (Contact Author)
Amherst College - Department of Economics ( email )
P.O. Box 5000
Amherst, MA 01002-5000
United States
413-542-5032 (Phone)
Sonali Jain-Chandra
Columbia University - Graduate School of Arts and Sciences - Department of Economics ( email )
420 W. 118th Street
New York, NY 10027
United States
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