Restructuring Korean Bank's Short-Term Debts in 1998 -Detailed Accounts and Their Implications-
- Restructuring Korean Bank's Short-Term Debts in 1998 -Detailed Accounts and Their Implications-
- Kim, Woochan; Byeon, Yangho
- Issue Date
- Series/Report no.
- KDI Working Paper Series;01-06
- This paper provides detailed accounts of the Korean banks’ debt restructuring process in the
first half of 1998. The paper hopes to serve as a future reference for those policy makers who
might later face a similar problem. To this end, the paper turned out to be a case study with
detailed accounts of events, explanations of major decisions, the logics behind them, and some
anecdotes. A unique aspect of this paper is that it describes the event from the debtors’
perspective unlike existing works written from the perspective of creditors or of an international
organization. The paper also uncovers the process Korean government had to take after a basic
agreement had been reached in New York, the process of which is not well known to the public
yet. The paper also attempts to provide some useful statistics regarding the effect of
government guarantees. It shows that, contrary to expectations, moral hazard did not reemerge
among the creditors and the debtors.
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