Governments frequently assist troubled banks. This paper examines the fiscal aspects of such assistance: rationale, design criteria, methods, and macroeconomic implications. It concludes that (1) banks should be assisted only when there is a clear systemic risk; (2) assistance should be tied to...

This paper aims to provide a balanced assessment of Korea Asset Management Corporation''s role in resolving nonperforming loans in the aftermath of the 1997-98 financial crisis. It argues that KAMCO''s incentive to dispose of NPLs can be explained by a strong social desire for a recovery of...

The Coronavirus disease (COVID-19) triggered a sharp contraction of economic activity across Asia and the Pacific. Policymakers adopted a 'whatever it takes' approach in their initial response, relying mainly on liquidity support to help firms survive the shock. This paper discusses how the...

Different levels of corporate leverage are used in this paper to help explain the wide range of post-crisis output adjustment across East Asia. In the model developed here, highly leveraged firms facing a cutoff of capital inflows are threatened by bankruptcy. These firms respond by eliminating...

The implementation of the Commercial Rehabilitation Law (CRL) on April 1, 2000 was considered a key event in setting up the official infrastructure supporting corporate restructuring in Japan. This study evaluates the stock price impact of restructuring announcements before and after the CRL...