The Impact of Foreign Banks on Monetary Policy Transmission During The Global Financial Crisis of 2007-9: Evidence from Korea
28 Pages Posted: 13 Feb 2014
Date Written: December 31, 2013
This paper examines the impact of foreign banks on the monetary policy transmission mechanism in the Korean economy during the period from 2000 to 2012, with a specific focus on the lending behavior by banks with different types of ownership. Using the bank-level panel data of the banking system in Korea, we present consistent evidence on the buffering and hampering impact of foreign banks, especially foreign bank branches, on the effectiveness of the monetary policy transmission mechanism in Korea from the bank-lending channel perspective during the period of the global financial crisis of 2008-9.
Keywords: foreign banks, global financial crisis, monetary policy, Korea
JEL Classification: E44, F43, G21
Suggested Citation: Suggested Citation