Article ID Journal Published Year Pages File Type
983619 The Quarterly Review of Economics and Finance 2006 28 Pages PDF
Abstract

We examine data (1994–2001) to determine if foreign banks’ behavior differed from domestic banks and if foreign banks helped to stabilize Korean markets. Foreign banks’ financial ratios differed from Korean banks with two notable exceptions: provisions for loan losses and loan growth. Before the Asian financial crisis, all banks’ loans generally did not respond to Korean market conditions. Post crisis, foreign banks reduced total lending. Foreign banks increased and Korean banks decreased won-denominated loans when Korean economic conditions improved after the crisis. Finally, foreign banks’ lending reacted to changes in home-country GDP growth and real interest rates.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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