Abstract
This study investigates the current role of the US "too-big-to-fail" (TBTF) policy for US banks in an international currency crisis in late 1997. It has been documented (Zhang, 2001) that the International Monetary Fund (IMF) term loan announcements concerning South Korea in late 1997 significantly increased the implicit value of the US bank loans and investments to South Korea and hence, the equity values of its US bank creditors. Using the market model, this paper examines the potential abnormal performance of the TBTF banks and the non-TBTF banks from different perspectives during mid-November to early December 1997. The evidence indicates the potential effectiveness of the implicit TBTF policy for US banks in the international currency crisis and the existence of the different pricing behavior of different groups of banks.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: Review of Pacific Basin Financial Markets and Policies
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
