Financial Restructuring in East Asia: Halfway There?

Financial Sector Discussion Paper No. 3.

37 Pages Posted: 13 Sep 2001

See all articles by Stijn Claessens

Stijn Claessens

Bank for International Settlements (BIS)

Simeon Djankov

London School of Economics & Political Science (LSE); Peter G. Peterson Institute for International Economics

Daniela Klingebiel

World Bank - Policy Unit

Date Written: September 1999

Abstract

Resolving systemic banking and corporate distress is no easy task. This paper reviews bank and corporate restructuring efforts in the four East Asian crisis countries. Indonesia, Republic of Korea, Malaysia, Thailand, and identifies remaining priorities for reform. The analysis indicates that two years into the process, much has been done,but much remains to be accomplished. Although governments have spent substantial resources to clean up the balance sheets of financial intermediaries, restructuring is incomplete, much new capital is still needed, and for most intervened financial institutions new private owners have yet to be found. Progress on corporate restructuring is less advanced, and many corporations remain overindebted. Durable economic recovery depends on further progress in both areas. In particular, decisive improvements in the allocation of investible funds will require better-capitalized banking systems and deeper institutional reforms in financial regulation and supervision, corporate governance, and bankruptcy procedures.

Keywords: Banking Crises, restructuring, emerging markets, public policy, regulation.

JEL Classification: G21, G28, G33, G34, G60

Suggested Citation

Claessens, Stijn and Djankov, Simeon and Klingebiel, Daniela, Financial Restructuring in East Asia: Halfway There? (September 1999). Financial Sector Discussion Paper No. 3.. Available at SSRN: https://ssrn.com/abstract=282584 or http://dx.doi.org/10.2139/ssrn.282584

Stijn Claessens

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
CH-4002 Basel
Switzerland

Simeon Djankov

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Peter G. Peterson Institute for International Economics ( email )

1750 Massachusetts Avenue, NW
Washington, DC 20036
United States

Daniela Klingebiel (Contact Author)

World Bank - Policy Unit ( email )

1818 H Street NW
Room MC 9-903
Washington, DC 20433
United States
202-473-7470 (Phone)
202-522-2031 (Fax)

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