Corporate Distress in East Asia : The Effect of Currency and Interest Rate Shocks

A study of the five countries most affected by the East Asian financial crisis - Indonesia, the Republic of Korea, Malaysia, the Philippines, and Thailand -- shows that more than 60 percent of firms are illiquid and 30 percent are technically insol...

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Main Authors:	Claessens, Stijn, Djankov, Simeon, Ferri, Giovanni
Format:	Viewpoint
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ASSETS BALANCE SHEET BALANCE SHEETS BANK FOR INTERNATIONAL SETTLEMENTS BANK LENDING BENCHMARK BONDS BORROWING CENTRAL BANK CORPORATE DEBT DEBT DEBT SERVICE DEBT TO EQUITY RATIO DEBT TO EQUITY RATIOS DEVALUATION DOMESTIC DEBT ECONOMICS EXCHANGE RATE EXCHANGE RATES FINANCIAL CRISIS FINANCIAL SECTOR FOREIGN EXCHANGE GDP ILLIQUIDITY INSOLVENCY INSURANCE INTEREST RATE INTEREST RATES LENDING RATES LIQUIDITY MARKET INSTRUMENTS NONBANK FINANCIAL INSTITUTIONS NONPERFORMING LOANS PROFITABILITY SOLVENCY STOCK EXCHANGES TREASURY BONDS WORKING CAPITAL CURRENCY FLUCTUATION FINANCIAL CRISES DEBT-EQUITY RATIO CORPORATE PERFORMANCE CORPORATE PROFITS GROSS DOMESTIC PRODUCT
Online Access:	http://documents.worldbank.org/curated/en/1999/01/441523/corporate-distress-east-asia-effect-currency-interest-rate-shocks http://hdl.handle.net/10986/11500

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recordtype	oai_dc
spelling	okr-10986-115002021-06-14T11:02:59Z Corporate Distress in East Asia : The Effect of Currency and Interest Rate Shocks Claessens, Stijn Djankov, Simeon Ferri, Giovanni ASSETS BALANCE SHEET BALANCE SHEETS BANK FOR INTERNATIONAL SETTLEMENTS BANK LENDING BENCHMARK BONDS BORROWING CENTRAL BANK CORPORATE DEBT DEBT DEBT SERVICE DEBT TO EQUITY RATIO DEBT TO EQUITY RATIOS DEVALUATION DOMESTIC DEBT ECONOMICS EXCHANGE RATE EXCHANGE RATES FINANCIAL CRISIS FINANCIAL SECTOR FOREIGN EXCHANGE GDP ILLIQUIDITY INSOLVENCY INSURANCE INTEREST RATE INTEREST RATES LENDING RATES LIQUIDITY MARKET INSTRUMENTS NONBANK FINANCIAL INSTITUTIONS NONPERFORMING LOANS PROFITABILITY SOLVENCY STOCK EXCHANGES TREASURY BONDS WORKING CAPITAL CURRENCY FLUCTUATION INTEREST RATES FINANCIAL CRISES LIQUIDITY INSOLVENCY DEBT-EQUITY RATIO CORPORATE PERFORMANCE CORPORATE PROFITS GROSS DOMESTIC PRODUCT A study of the five countries most affected by the East Asian financial crisis - Indonesia, the Republic of Korea, Malaysia, the Philippines, and Thailand -- shows that more than 60 percent of firms are illiquid and 30 percent are technically insolvent. Among solvent firms, about half are at risk of insolvency unless their liquidity constraints are relieved. Worst affected is Indonesia, with 77 percent of firms illiquid and 65 percent insolvent, followed by Korea and Thailand. Extrapolations using these findings suggest that non-performing loans in the five countries could amount to 7 to 30 percent of Gross Domestic Product (GDP) and non-performing assets to more than a third of their combined GDP. 2012-08-13T15:14:17Z 2012-08-13T15:14:17Z 1999-01 http://documents.worldbank.org/curated/en/1999/01/441523/corporate-distress-east-asia-effect-currency-interest-rate-shocks http://hdl.handle.net/10986/11500 English Viewpoint: Public Policy for the Private Sector; Note No. 172 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Viewpoint Publications & Research East Asia and Pacific Indonesia Thailand Malaysia Philippines Korea, Republic of Taiwan China
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ASSETS BALANCE SHEET BALANCE SHEETS BANK FOR INTERNATIONAL SETTLEMENTS BANK LENDING BENCHMARK BONDS BORROWING CENTRAL BANK CORPORATE DEBT DEBT DEBT SERVICE DEBT TO EQUITY RATIO DEBT TO EQUITY RATIOS DEVALUATION DOMESTIC DEBT ECONOMICS EXCHANGE RATE EXCHANGE RATES FINANCIAL CRISIS FINANCIAL SECTOR FOREIGN EXCHANGE GDP ILLIQUIDITY INSOLVENCY INSURANCE INTEREST RATE INTEREST RATES LENDING RATES LIQUIDITY MARKET INSTRUMENTS NONBANK FINANCIAL INSTITUTIONS NONPERFORMING LOANS PROFITABILITY SOLVENCY STOCK EXCHANGES TREASURY BONDS WORKING CAPITAL CURRENCY FLUCTUATION INTEREST RATES FINANCIAL CRISES LIQUIDITY INSOLVENCY DEBT-EQUITY RATIO CORPORATE PERFORMANCE CORPORATE PROFITS GROSS DOMESTIC PRODUCT
spellingShingle	ASSETS BALANCE SHEET BALANCE SHEETS BANK FOR INTERNATIONAL SETTLEMENTS BANK LENDING BENCHMARK BONDS BORROWING CENTRAL BANK CORPORATE DEBT DEBT DEBT SERVICE DEBT TO EQUITY RATIO DEBT TO EQUITY RATIOS DEVALUATION DOMESTIC DEBT ECONOMICS EXCHANGE RATE EXCHANGE RATES FINANCIAL CRISIS FINANCIAL SECTOR FOREIGN EXCHANGE GDP ILLIQUIDITY INSOLVENCY INSURANCE INTEREST RATE INTEREST RATES LENDING RATES LIQUIDITY MARKET INSTRUMENTS NONBANK FINANCIAL INSTITUTIONS NONPERFORMING LOANS PROFITABILITY SOLVENCY STOCK EXCHANGES TREASURY BONDS WORKING CAPITAL CURRENCY FLUCTUATION INTEREST RATES FINANCIAL CRISES LIQUIDITY INSOLVENCY DEBT-EQUITY RATIO CORPORATE PERFORMANCE CORPORATE PROFITS GROSS DOMESTIC PRODUCT Claessens, Stijn Djankov, Simeon Ferri, Giovanni Corporate Distress in East Asia : The Effect of Currency and Interest Rate Shocks
geographic_facet	East Asia and Pacific Indonesia Thailand Malaysia Philippines Korea, Republic of Taiwan China
relation	Viewpoint: Public Policy for the Private Sector; Note No. 172
description	A study of the five countries most affected by the East Asian financial crisis - Indonesia, the Republic of Korea, Malaysia, the Philippines, and Thailand -- shows that more than 60 percent of firms are illiquid and 30 percent are technically insolvent. Among solvent firms, about half are at risk of insolvency unless their liquidity constraints are relieved. Worst affected is Indonesia, with 77 percent of firms illiquid and 65 percent insolvent, followed by Korea and Thailand. Extrapolations using these findings suggest that non-performing loans in the five countries could amount to 7 to 30 percent of Gross Domestic Product (GDP) and non-performing assets to more than a third of their combined GDP.
format	Publications & Research :: Viewpoint
author	Claessens, Stijn Djankov, Simeon Ferri, Giovanni
author_facet	Claessens, Stijn Djankov, Simeon Ferri, Giovanni
author_sort	Claessens, Stijn
title	Corporate Distress in East Asia : The Effect of Currency and Interest Rate Shocks
title_short	Corporate Distress in East Asia : The Effect of Currency and Interest Rate Shocks
title_full	Corporate Distress in East Asia : The Effect of Currency and Interest Rate Shocks
title_fullStr	Corporate Distress in East Asia : The Effect of Currency and Interest Rate Shocks
title_full_unstemmed	Corporate Distress in East Asia : The Effect of Currency and Interest Rate Shocks
title_sort	corporate distress in east asia : the effect of currency and interest rate shocks
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/1999/01/441523/corporate-distress-east-asia-effect-currency-interest-rate-shocks http://hdl.handle.net/10986/11500
_version_	1764416959088164864

Corporate Distress in East Asia : The Effect of Currency and Interest Rate Shocks

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