The Impact of Foreign Banks on Monetary Policy Transmission During The Global Financial Crisis of 2007-9: Evidence from Korea

28 Pages Posted: 13 Feb 2014

See all articles by Bang Nam Jeon

Bang Nam Jeon

Drexel University - Department of Economics & International Business; Drexel University-School of Economics

Hosung Lim

The Bank of Korea; Bank of Korea - Economic Research Institute

Ji Wu

Southwestern University of Finance and Economics (SWUFE) - Research Institute of Economics & Management; Pennsylvania State University Harrisburg

Date Written: December 31, 2013

Abstract

This paper examines the impact of foreign banks on the monetary policy transmission mechanism in the Korean economy during the period from 2000 to 2012, with a specific focus on the lending behavior by banks with different types of ownership. Using the bank-level panel data of the banking system in Korea, we present consistent evidence on the buffering and hampering impact of foreign banks, especially foreign bank branches, on the effectiveness of the monetary policy transmission mechanism in Korea from the bank-lending channel perspective during the period of the global financial crisis of 2008-9.

Keywords: foreign banks, global financial crisis, monetary policy, Korea

JEL Classification: E44, F43, G21

Suggested Citation

Jeon, Bang Nam and Lim, Hosung and Wu, Ji, The Impact of Foreign Banks on Monetary Policy Transmission During The Global Financial Crisis of 2007-9: Evidence from Korea (December 31, 2013). Available at SSRN: https://ssrn.com/abstract=2395085 or http://dx.doi.org/10.2139/ssrn.2395085

Bang Nam Jeon (Contact Author)

Drexel University - Department of Economics & International Business ( email )

3141 Chestnut St.
Philadelphia, PA 19104
United States

Drexel University-School of Economics ( email )

3141 Chestnut St.
Philadelphia, PA 19104
United States

Hosung Lim

The Bank of Korea ( email )

39, Namdaemun-ro, Jung-gu
Seoul, 04531
Korea, Republic of (South Korea)

Bank of Korea - Economic Research Institute ( email )

110, 3-Ga, Namdaemunno, Jung-Gu
Seoul 100-794
Korea, Republic of (South Korea)

Ji Wu

Southwestern University of Finance and Economics (SWUFE) - Research Institute of Economics & Management ( email )

55 Guanghuacun St
Chengdu, Sichuan 610074
China

Pennsylvania State University Harrisburg ( email )

777 West Harrisburg Pike
Middletown, PA 17057
United States

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