Performance of East Asian banking sectors under IMF-supported programs

Luc Can, Mohamed Ariff

Research output: Contribution to journalArticleResearchpeer-review

1 Citation (Scopus)

Abstract

This paper reports the performance of the banking sectors of four crisis-hit East Asian economies, under IMF-restructuring programs, over the pre- and post-restructuring periods. Results from the widely used structural analysis model indicate that the four banking sectors have become moderately concentrated, resulting in a narrower reach of banking services to customers. Because of governments' re-privatization of banks and the relaxation for foreign bank entry, foreign ownership has increased. Our financial analysis shows significant improvements in financial intermediation, efficiency and soundness. More special efforts, however, need to be made to regain performance levels in credit provision to the private sector, and increase depositor confidence, operating efficiency, and profitability. Our results suggest that it is imperative for policy-makers to realize and balance the trade-off between achieving financial soundness and providing private credit access. In addition, although new policy (deposit insurance) has been adopted to assure depositors of their investments, long-term measures such as better risk management practices should be in place to ensure safety and the soundness of banks, and thus the confidence of the depositors.

Original languageEnglish
Pages (from-to)5-26
Number of pages22
JournalJournal of the Asia Pacific Economy
Volume14
Issue number1
DOIs
Publication statusPublished - 2009

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banking
IMF
restructuring
bank
credit provision
credit
confidence
performance
efficiency
structural analysis
privatization
profitability
risk management
private sector
trade-off
insurance
ownership
management practice
customer
safety

Cite this

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Performance of East Asian banking sectors under IMF-supported programs. / Can, Luc; Ariff, Mohamed.

In: Journal of the Asia Pacific Economy, Vol. 14, No. 1, 2009, p. 5-26.

Research output: Contribution to journalArticleResearchpeer-review

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