Premium
Gross Loan Flows, Financial Crises, and Banking Sector Reforms: Evidence from Korea
Author(s) -
Hyun Junghwan
Publication year - 2016
Publication title -
asia‐pacific journal of financial studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.375
H-Index - 15
eISSN - 2041-6156
pISSN - 2041-9945
DOI - 10.1111/ajfs.12149
Subject(s) - loan , restructuring , financial system , financial crisis , non performing loan , business , portfolio , economics , financial sector , monetary economics , finance , macroeconomics
This paper explores gross loan flows in Korea from 1984 to 2014 focusing on how gross loan flows differ before and after the 1997 global financial crisis and how they respond to the crisis and the associated banking sector reforms. The paper shows that sizable loan expansion and contraction, measured as deviations from the industry loan growth trend, coexist over time, indicating intense heterogeneity in bank lending. Also, the crisis and the reforms and restructuring of the banking sector are largely attributable to changes in gross loan flows in the post‐crisis period. Particularly, banks' asset portfolio reallocation occurs from the commercial sector to individual customers after the crisis.