Lessons Learned from Past Financial Crises : Korea 1998-2000 - Investing Equity/Quasi-Equity with Agility in Financial Institutions
International Finance Corporation (IFC) was very active in the Republic of Korea immediately after the Asian financial crisis erupted in 1997. IFC reestablished operations in Korea and opened a local office in October 1998, and closed it in late 20...
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| Format: | Brief |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2008/12/10183241/lessons-learned-past-financial-crises-korea-1998-2000-investing-equityquasi-equity-agility-financial-institutions http://hdl.handle.net/10986/10576 |
| Summary: | International Finance Corporation (IFC)
was very active in the Republic of Korea immediately after
the Asian financial crisis erupted in 1997. IFC
reestablished operations in Korea and opened a local office
in October 1998, and closed it in late 2002 after Korea
recovered from the crisis. At the end of 1997, the Korean
economy suddenly started to contract, the Korean won
plummeted by over 100 percent against the US dollar, and
liquidity in the banking sector dried up. Major commercial
banks as well as smaller specialized financial institutions
all faced increases in non-performing loans and were unable
to roll over their shorter-term funding. In response to this
crisis, IFC's first priority was to strengthen
financial institutions through both financing and advisory
services, and enable them to lead the restructuring process.
IFC then injected liquidity into the trading system through
trade enhancement facilities. IFC supported the
restructuring of corporations facing liquidity problems and
helped its clients grow as the recovery began. IFC helped
strengthen Korea's financial sector by giving priority
to financial sector reform. The Board approved investments
of about US$670 million in 16 banks and finance companies. |
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