Taking the Korean experience as a laboratory experiment in systemic financial crises, the authors analyze distress in individual institutions among two groups of financial intermediaries. They pool together a group of large financial intermediaries (commercial banks, merchant banking...

The authors suggest that the credit channel - as a transmitter of monetary and financial shocks - appears to have aggravated the Republic of Korea's economic crisis. They use micro-data gathered at the bank level to better identify this channel of transmission. They find that: 1) Monetary...

A systemic financial crisis with monetary restriction is probably the most promising occasion for assessing whether, and to what extent, relationship banking is valuable to borrowers. The authors take this question to a unique database of credit bureau, microeconomic information covering the...

Politics and regulatory capture can play an important role in financial institutions'distress. East Asia's financial crisis featured many distressed and closed financial intermediaries in an environment with many links between government, politicians, supervisors, and financial institutions....

In the East Asian crisis, connections - with industrial groups or influential families - increased the probability of distress for financial institutions. Connections also made closure more, not less, likely, suggesting that the closure processes themselves were transparent. But larger...