Evidence of effective financial crisis management from South Korea

An example for other regions

Bibliographic Data

ID12846400
AuthorsSaysi Sayaseng (Corvinus University of Budapest, corresponding author)
Year2020
Volume42
Issue1
Pages21-38
Publication date2020-03-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueSociety and Economy (JOURNAL)
Journal identifiersISSN: 1588-970X • E-ISSN: 1588-9726
PublisherAkadémiai Kiadó (PUBLISHER • HU)
DOI10.1556/204.2020.00002
OpenAlexW3018004772
LanguageEN
References cited9

Evidence from the global financial crisis (2007–2008) and the Asian financial crisis (1997) have taught policymakers valuable lessons. The contagious effects of these crises have proven unavoidable and have led to negative economic development. However, South Korea, unlike other countries, has recovered remarkably from both episodes of financial turmoil and proved their ability to maintain positive growth throughout the two periods. This study investigates the correlation between the evolution of South Korean banking and corporate sector before, during and after these crises. A VAR model was employed to test the effectiveness of the South Korean government's policies, in response to the financial crisis from 1997 to 2017, using macroeconomic variables as proxies for newly introduced policies, and non-performing loans for controlled risks. The empirical results indicate impulse response functions which suggest that changes in macroeconomic variables as a representation for the policies resulted in a reduction of non-performing loans. This implies successful risk reduction and an overall economic recovery

Business · Chaebol · Corporate governance · Development economics · Economics · Financial crisis · Financial sector · Financial system · Government (linguistics · Macroeconomics · Non-performing loan · Banking stability, regulation, efficiency · Global Financial Crisis and Policies · Monetary Policy and Economic Impact · Finance

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