Gross Loan Flows, Financial Crises, and Banking Sector Reforms: Evidence from Korea1. (24th October 2016)

• Record Type: Journal Article
• Authors: Hyun, Junghwan
• Is Part Of: Asia-Pacific journal of financial studies. Volume 45:Number 5(2016:Oct.)
• Page Start: 705
• Page End: 728
• Publication Date: 2016-10-24
• Subjects: Gross loan flows -- Korean banking sector -- Financial crisis -- Banking sector reforms; Pacific Area -- Economic conditions -- Periodicals; Finance -- Asia -- Periodicals; Finance -- Pacific Area -- Periodicals; Asia -- Economic conditions -- Periodicals; 332.09505
• DOI: 10.1111/ajfs.12149
• Languages: English
• ISSNs: 2041-9945

Abstract

Abstract: 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.