Book contents
- Monetary Policy and Central Banking in Korea
- Monetary Policy and Central Banking in Korea
- Copyright page
- Dedication
- Contents
- Figures
- Tables
- Boxes
- Preface and Acknowledgements
- Abbreviations
- Part I What Is the Goal of Korean Monetary Policy?
- Part II How Does Money Affect the Korean Economy?
- Part III How Is Monetary Policy Conducted in Korea?
- Part IV How Is Financial Stability Pursued in Korea?
- 10 Financial Crisis and the Role of Government
- 11 Macro-prudential Regulation and Supervision
- 12 Crisis Management and Lender of Last Resort
- Part V What Will Be the Challenge for Future Monetary Policy in Korea?
- References
- Index
10 - Financial Crisis and the Role of Government
from Part IV - How Is Financial Stability Pursued in Korea?
Published online by Cambridge University Press: 17 February 2022
- Monetary Policy and Central Banking in Korea
- Monetary Policy and Central Banking in Korea
- Copyright page
- Dedication
- Contents
- Figures
- Tables
- Boxes
- Preface and Acknowledgements
- Abbreviations
- Part I What Is the Goal of Korean Monetary Policy?
- Part II How Does Money Affect the Korean Economy?
- Part III How Is Monetary Policy Conducted in Korea?
- Part IV How Is Financial Stability Pursued in Korea?
- 10 Financial Crisis and the Role of Government
- 11 Macro-prudential Regulation and Supervision
- 12 Crisis Management and Lender of Last Resort
- Part V What Will Be the Challenge for Future Monetary Policy in Korea?
- References
- Index
Summary
Financial markets are subject to constant shocks, which can lead to crises when markets fail. Theoretically, the government can prevent such market failures. In practice, however, crises are often caused or amplified by government failure. This was particularly the case for the 1997 currency crisis in Korea. Not only did the Korean government’s inappropriate intervention trigger the crisis, but its inappropriate policy responses further transformed the initial mistakes into an economic disaster. This stands in sharp contrast to the government’s responses to the 2008 global economic crisis and the 2020 COVID-19 pandemic. This chapter overviews the roles played by the Korean government during these three crises.
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- Monetary Policy and Central Banking in Korea , pp. 235 - 260Publisher: Cambridge University PressPrint publication year: 2022