Restructuring Korean Banks' Short-Term Debts in 1998 - Detailed Accounts and Their Implications

Korean Crisis and Recovery, David T. Coe and Se-Jik Kim, International Monetary Fund aand Korea Institute for International Economic Policy, 2002

71 Pages Posted: 6 Oct 2004

See all articles by Woochan Kim

Woochan Kim

Korea University Business School; European Corporate Governance Institute (ECGI); Asian Institute of Corporate Governance (AICG)

Byeon Yangho

Ministry of Finance and Economy, Korea

Abstract

This paper provides detailed accounts of the Korean banks' debt restructuring process in the first half of 1998. The paper hopes to serve as a future reference for those policy makers who might later face a similar problem. To this end, the paper turned out to be a case study with detailed accounts of events, explanations of major decisions, the logics behind them, and some anecdotes. A unique aspect of this paper is that it describes the event from the debtors' perspective unlike existing works written from the perspective of creditors or of an international organization. The paper also uncovers the process Korean government had to take after a basic agreement had been reached in New York, the process of which is not well known to the public yet. The paper also attempts to provide some useful statistics regarding the effect of government guarantees. It shows that, contrary to expectations, moral hazard did not reemerge among the creditors and the debtors.

Keywords: debt restructuring, currency crisis, banking crisis, Korea, negotiation

JEL Classification: F32, F34

Suggested Citation

Kim, Woochan and Yangho, Byeon, Restructuring Korean Banks' Short-Term Debts in 1998 - Detailed Accounts and Their Implications. Korean Crisis and Recovery, David T. Coe and Se-Jik Kim, International Monetary Fund aand Korea Institute for International Economic Policy, 2002. Available at SSRN: https://ssrn.com/abstract=600223

Woochan Kim (Contact Author)

Korea University Business School ( email )

LG-POSCO Bldg #524
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Seoul, Seoul 136701
+822-3290-2816 (Phone)
+822-922-7220 (Fax)

HOME PAGE: http://biz.korea.ac.kr/professor/wckim

European Corporate Governance Institute (ECGI) ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Asian Institute of Corporate Governance (AICG) ( email )

1, 5-ga, Anam-dong
Sungbuk-gu
Seoul, 136-701
Korea, Republic of (South Korea)

Byeon Yangho

Ministry of Finance and Economy, Korea ( email )

Government Complex II
Gwacheon, 427-7
Korea, Republic of (South Korea)

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