After the Crisis: Difference between revisions
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='''Reconstruction by Government'''= | ='''Reconstruction by the Government'''= | ||
The Korean did three things with extreme precision that allowed them to recover from this “Asian Crisis” faster then many of their neighbors. These three things are: the injection of public funds, the Korea Asset Management Corporation’s (KAMCO) purchase of bad debts, and Financial Supervisory Commission (FSC) ability to enforce these and all other reforms. (5) | The Korean did three things with extreme precision that allowed them to recover from this “Asian Crisis” faster then many of their neighbors. These three things are: the injection of public funds, the Korea Asset Management Corporation’s (KAMCO) purchase of bad debts, and Financial Supervisory Commission (FSC) ability to enforce these and all other reforms. (5) | ||
Revision as of 20:24, 2 December 2006
The Korean Economic Crisis | The Prologue: Before the Crisis | During the Crisis | After the Crisis | Korean Crisis Works Cited
Reconstruction by the Government
The Korean did three things with extreme precision that allowed them to recover from this “Asian Crisis” faster then many of their neighbors. These three things are: the injection of public funds, the Korea Asset Management Corporation’s (KAMCO) purchase of bad debts, and Financial Supervisory Commission (FSC) ability to enforce these and all other reforms. (5)
The government put 64 trillion won toward the rehabilitation of the Korean economy. The majority of this money came from the IMF. This sum translates to 15% of Korea’s GDP. It took only five moths for the IMF to respond with support. Then Korea went to work putting 33 trillion won for the purchase of bad debts by the Korea Asset Management Corporation (KAMCO), 13 trillion won for raising capital, and another 18 trillion won for expanding the operations of the Korea Deposit Insurance Corporation (KDIC). All of these funds were distributed by the end of 1998. The remainder of these funds was used in1999 to supplement the money already invested. (5)
The KAMCO aided reconstruction greatly. They started by purchasing bad debt from financial institutions. Between October 1998 and June 1999 KAMCO had purchased 44 trillion in bad debt. KAMACO has also issued bond in order to raise capital they plan to get ride of all bad debt with in the five year period of these bonds through various methods. By implementing these policies at such a fast rate Korea was able to pull them selves out of crisis much faster then expected.(5)
In April 1998 the Financial Supervisory Commission (FSC) was born. This organization was given power over the financial sector which was formally split between the Bank of Korea, the Ministry of Finance and Economy and the Security Exchange Commission. This was the first time that the Korean banking system was organized under one governing body. This aided in the implementation of the reforms of the IMF. (5)
