1. Introduction -- 2. Pre-crisis financial system in Korea -- 3. The nature of the crisis and reform environment -- 4. The politics of reform in the transition period -- 5. Financial sector reform and the role of foreign capital -- 6. Conclusion

This paper empirically examines how capital affects a bank's performance (survival and market share), and how this effect varies across banking crises, market crises, and normal times that occurred in the U.S. over the past quarter century. We have two main results. First, capital helps small...