The financial crisis in South Korea refers to the collapse of the financial system at the beginning of 1997+0 1. Since 1997, large industrial enterprises in Korea have gone bankrupt one after another. Hanbao Steel, the largest industrial group in Korea 14, declared bankruptcy; Sanmei Group, Han Tai Group and Korea New Core Group, the 26 largest industrial groups in Korea, went bankrupt one after another; even Kia Group, the symbol of Korean national industry, also declared bankruptcy.
After the crisis began, when financial institutions in countries and regions entering the crisis first transferred foreign exchange investment or loans from South Korea to ensure their own demand, Koreans' severe judgment on the shortage of foreign exchange quickly turned to the decision to request emergency foreign exchange loans from the IMF.
However, based on the analysis report provided by an American economist, the IMF identified the fragility of South Korea's economic, financial and monetary systems, and insisted that the IMF's short-term loans should be linked to the restructuring and transformation of the Korean economic system. While providing short-term loans, South Korea must accept the IMF's fiscal and monetary policy arrangements and the restructuring and transformation design of the economic and financial system, which has led to South Korea becoming a crisis center country.
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The causes of the Korean economic crisis;
(1) Authoritarian politics and strong government have led South Korea to the fast lane of economic growth, but they have also spawned many chaebol enterprises with high debt, high credit and low profits, which have become hidden germs in the blood of South Korea's economy. In the early 1970s and 1980s, due to excessive borrowing and insolvency, the Korean economy was on the verge of crisis.
(2) After Korea opened its capital account in the early 1990s, foreign capital mainly entered Korea through bank loans. Korean companies not only borrow from domestic banks, but also from foreign banks. 1997 after the Asian financial crisis, foreign debts due could not be repaid, and foreign creditors refused to provide credit to Korean enterprises and financial institutions.
Baidu Encyclopedia-Korea Financial Crisis
Baidu Encyclopedia-International Monetary Fund