Korea Institute of Finance

New Publications

An analysis of problematic credit card debt in Korea
Using the Korean personal loan data from 2012 to 2016, this paper analyzes how problematic credit card debt persists over time and the role of income. First, there is a group of consumers who carry potentially problematic card debt for a number of years. 7.2% of credit card holders in 2016 had credit card debt more than their income over past 12 months and this debt overhang problem persisted throughout the sample period. Meanwhile, credit card holders who missed repayments more than 90 days wer...
KIF Research Paper Soo Jin Lee
Domestic Banks' Deposit and Asset Productivity: Focusing on Deposit Market Competition
In this paper, I estimate the deposit and asset productivities of Korean domestic banks a la Egan, Lewellen, and Sunderam (2022). Deposit productivity is highest in internet-only banks, followed by commercial banks, specialized banks, and regional banks; deposit productivity has high persistence, indicating that it is heavily influenced by the unique characteristics and capabilities of each bank. Asset productivity is highest in internet-only banks, followed by regional banks, specialized banks...
KIF Research Paper Heung Jin Kwon
The Amplification Effects of Firms' Financial Constraints on Industry Downturns
Prior studies have shown that firms’ financial constraints can amplify economic downturns. While major industries in Korea can face the amplification effects of industry downturns because of firms’ high debt ratios, there are few studies that have documented this for firms and industries in Korea. This study examines the impact of financial constraints on the value of peer firms during the industry downturns, and measures the degree of amplification of the recession. Empirical results show tha...
KIF Research Paper Bomi Lee

Financial Research Brief

23-11 May 26, 2023
The Likelihood of Bank of Japan's Monetary Policy Stance Shift and Its Implications
As Kazuo Ueda took office as the new governor of Bank of Japan, there has been a growing attention on whether the Bank of Japan would change its stance on monetary policy. It is uncertain whether the Japanese economy could escape a prolonged period of deflation despite recent inflation, and an abrupt change in Japan’s monetary policy is unlikely in the near term, as it could trigger financial market instability through the liquidation of yen carry trades. Yet, the adverse effects of a prolonged...
Financial Review Hyuntae Kim
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Reports

  • An analysis of problematic credit card debt in Korea
    Using the Korean personal loan data from 2012 to 2016, this paper analyzes how problematic credit card debt persists over time and the role of income. First, there is a group of consumers who carry potentially problematic card debt for a number of years. 7.2% of credit card holders in 2016 had credit card debt more than their income over past 12 months and this debt overhang problem persisted throughout the sample period. Meanwhile, credit card holders who missed repayments more than 90 days wer...
    KIF Research Paper Soo Jin Lee MAY 2023
  • Domestic Banks' Deposit and Asset Productivity: Focusing on Deposit Market Competition
    In this paper, I estimate the deposit and asset productivities of Korean domestic banks a la Egan, Lewellen, and Sunderam (2022). Deposit productivity is highest in internet-only banks, followed by commercial banks, specialized banks, and regional banks; deposit productivity has high persistence, indicating that it is heavily influenced by the unique characteristics and capabilities of each bank. Asset productivity is highest in internet-only banks, followed by regional banks, specialized banks...
    KIF Research Paper Heung Jin Kwon APR 2023
  • The Amplification Effects of Firms' Financial Constraints on Industry Downturns
    Prior studies have shown that firms’ financial constraints can amplify economic downturns. While major industries in Korea can face the amplification effects of industry downturns because of firms’ high debt ratios, there are few studies that have documented this for firms and industries in Korea. This study examines the impact of financial constraints on the value of peer firms during the industry downturns, and measures the degree of amplification of the recession. Empirical results show tha...
    KIF Research Paper Bomi Lee MAR 2023
  • Management of Non-Banks' Real Estate Project Financing Risks
    This study identifies the risks related to real estate project financing of non-banks in Korea. It is then followed by proposals of mid- to long-term policies on how to overcome market stringency when such risks are realized and prevent crises from real estate project financing that are repeatedly taking place. Real estate projects generally falter when faced with various credit events: The delay in payment collection due to late occupancy from housings remaining vacant or unsold, default on pr...
    KIF Analysis Paper Yong-Sang Shyn JAN 2023
  • Executive Tenure and Firm Performance: Evidence from Korean Insurance Companies
    Corporate short-termism of insurance firms is recently emerging as a major issue within and among the industry, academia, and policy authorities. Taking into account that profit and loss of insurers are generated over a long-term period, the management’s pursuit for short-term performance may be followed by overall profitability deterioration and corporate value decrease in the long haul. Moreover, the changes in internal and external environment such as the aging population, low growth momentu...
    KIF Research Paper Sukho Lee, Sangyong Han JAN 2023
  • The Analysis and Implications on Changes in Household Assets: Comparison Between Pre- and Post-COVID-19 Pandemic
    In this paper I analyze how the size and structure of the household asset changed before and after the covid-19 pandemic depending on the household characteristics. According to the empirical analysis, younger generation showed significant decrease in the propensity to hold bank savings or long-term savings type insurance and increase in the propensity to hold risky financial assets compared to other age groups. Recently in addition to the current asset-building program on the welfare level, the...
    KIF Analysis Paper KyooBok Lee JAN 2023
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