Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/76998
Authors: 
Müller, Ralf
Year of Publication: 
2001
Series/Report no.: 
IWH Discussion Papers 139
Abstract: 
One of the reforms that have to be launched in a future unification process in Korea, which seems possible after the political negotiations last year, is the transformation of the North Korean banking system. The question arises whether Korea could profit from the German experience where banking transformation was one of the rather few success stories in unification. In 1990 the East German banking transformation was achieved relatively fast and uncomplicated due to considerable direct investments of the West German banks compounded with state guarantees for bad loans resulting from the credit business with existing GDR-corporations. Unfortunately, South Korea currently lacks some major prerequesites that contributed to the German banking unification, among them - and probably the most important one - is the lack of a sound and efficient banking system that could become active in the North. Consequently, depending on the circumstances of a future Korean unification either a more gradual process is recommended or, if inner-Korean migration requires a more dynamic transition, considerable investment by foreign banks and assistance from international organisations is recommended.
Subjects: 
banking
East Germany
Korea
transformation
unification
JEL: 
G21
N25
P21
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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