Do foreign bank operations provide a stabilizing influence in Korea?

Yongil Jeon, Stephen M. Miller, Paul A. Natke

Research output: Contribution to journalArticlepeer-review

10 Scopus citations


We examine data (1994-2001) to determine if foreign banks' behavior differed from domestic banks and if foreign banks helped to stabilize Korean markets. Foreign banks' financial ratios differed from Korean banks with two notable exceptions: provisions for loan losses and loan growth. Before the Asian financial crisis, all banks' loans generally did not respond to Korean market conditions. Post crisis, foreign banks reduced total lending. Foreign banks increased and Korean banks decreased won-denominated loans when Korean economic conditions improved after the crisis. Finally, foreign banks' lending reacted to changes in home-country GDP growth and real interest rates.

Original languageEnglish
Pages (from-to)82-109
Number of pages28
JournalQuarterly Review of Economics and Finance
Issue number1
StatePublished - Feb 2006


  • Asian financial crisis
  • Foreign bank operations
  • Korean commercial banks
  • Stabilization


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