Lessons Learned from Past Financial Crises : Korea 1998-2000 - Investing Equity/Quasi-Equity with Agility in Financial Institutions

Masse, Jean-Marie

World Bank, Washington, DC

关键词: ACCOUNTING;    ACCOUNTING STANDARDS;    ADVISORY SERVICES;    BALANCE SHEET;    BANK MERGERS;   

RP-ID  :  47150

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

International Finance Corporation (IFC)was very active in the Republic of Korea immediately afterthe Asian financial crisis erupted in 1997. IFCreestablished operations in Korea and opened a local officein October 1998, and closed it in late 2002 after Korearecovered from the crisis. At the end of 1997, the Koreaneconomy suddenly started to contract, the Korean wonplummeted by over 100 percent against the US dollar, andliquidity in the banking sector dried up. Major commercialbanks as well as smaller specialized financial institutionsall faced increases in non-performing loans and were unableto roll over their shorter-term funding. In response to thiscrisis, IFC's first priority was to strengthenfinancial institutions through both financing and advisoryservices, and enable them to lead the restructuring process.IFC then injected liquidity into the trading system throughtrade enhancement facilities. IFC supported therestructuring of corporations facing liquidity problems andhelped its clients grow as the recovery began. IFC helpedstrengthen Korea's financial sector by giving priorityto financial sector reform. The Board approved investmentsof about US$670 million in 16 banks and finance companies.