Relationship banking, with surviving banks, has a positive value during a systemic financial crisis. For many viable small and medium-size businesses in the Republic of Korea, relationship banking reduced liquidity constraints and thus diminished the probability of unwarranted bankruptcy during...

When negative monetary and financial shocks hit the Korean economy, reactions in the financial system amplified the impact of the shocks by reducing the credit available and increasing its cost. This particularly hurt segments of the economy that rely heavily on bank credit for external...

type="main" xml:lang="en" <p>We demonstrate that the credit channel of transmission of monetary/financial shocks appears to have aggravated Korea's economic crisis. We use micro-data gathered at the individual bank level to identify this channel of transmission. Our major findings are as follows:...</p>