Banks, the IMF, and the Asian Crisis

44 Pages Posted: 12 Jul 2000 Last revised: 12 Feb 2022

See all articles by Bong-Chan Kho

Bong-Chan Kho

Seoul National University, Business School

René M. Stulz

Ohio State University (OSU) - Department of Finance; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

Multiple version iconThere are 2 versions of this paper

Date Written: September 1999


This paper examines the impact of the Asian crisis on bank stocks across four Western countries and six Asian countries. In the second half of 1997, Western banks experienced positive returns. In contrast East Asian bank indices incurred losses in excess of 60% in each of the crisis countries. Most of this poor performance is explained by the exposure of the banks to general stock market movements in their countries. Currency exposures affected banks adversely beyond their stock market impact only in Indonesia and the Philippines. Except for the Korean program, IMF programs had little effect on bank values. The announcement of the Korean program increased shareholder wealth at the U.S. banks with the highest reported exposure in Korea by about 7% and had a favorable effect on bank shareholder wealth in all the countries in our sample but one. There is no evidence that the Korean IMF program had a positive impact on banks without exposure to Korea and hence our results do not support the argument that such programs reduce systemic risk.

Suggested Citation

Kho, Bong-Chan and Stulz, Rene M., Banks, the IMF, and the Asian Crisis (September 1999). NBER Working Paper No. w7361, Available at SSRN:

Bong-Chan Kho (Contact Author)

Seoul National University, Business School ( email )

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Rene M. Stulz

Ohio State University (OSU) - Department of Finance ( email )

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National Bureau of Economic Research (NBER)

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