Financial Sector Reform in Korea after the Asian Financial Crisis

Baekin Cha

Research Fellow, Korea Institute of Finance, 7th Fl., KFB Bldg., 4-1, 1-Ga, Myong-Dong, Chung-Gu, Seoul, 100-021, Korea, Tel: +82-2-3705-6313, Fax: +82-2-3705-6309 bicha@sun.kif.re.kr

JEL Classification: G18

Abstract

Since introducing the IMF stabilizing package in December 1997, major steps have been taken to restructure the financial sector in Korea. The financial sector reform until now is appraised to have laid the foundation for solid economic recovery and restoration of the sovereign credit rating. In particular, various measures to clean the balance sheets of financial institutions were, in a large part, successful in providing the foundation for an early normalization of the financial system and easing the credit crunch situation.

Acknowledgments

I wish to thank Professor Jang-Ok Cho and anonymous referees for insightful comments on an earlier draft of the paper. Responsibility for any remaining errors rests with the author.

References

Financial Supervisory Commission. “Good Bank/Bad Bank Implication for Korean Banking Sector Restructuring.” July 1998.
Financial Supervisory Commission. “Best Practice Guidelines.” September 1998.
Financial Supervisory Commission.“Government Participation in Bank Restructuring.” September 1998.
Financial Supervisory Commission.“Structural Reform in Korea.” February 1999.
Ministry of Finance and Economy. “Reference Information for the Korea Forum.” 1998.
Ministry of Finance and Economy.“The Year in Review: Korea's Reform Progress.” November 1998.