Introduced in 2010, the regulation obliging one-year duration for credit card rewards programs may have provided card companies with a cost-saving justification for terminating rewards program prematurely. In addition, the recently announced revision to the Regulation on Supervision of...

The substantial influence of CEOs diminishes the oversight function of the board of directors. Many outside directors have social ties with CEOs and their behavioral patterns are inconsistent with those of vigilant monitors. Dissents are rare, and those who do dissent are highly likely to be...

An analysis of Korean firm data reveals that there is a higher tendency for CEOs in cartel firms to maintain their posts when the overall industrial performance, and not the individuals' relative performance, is high. This implies that an incentive for collusion, instead of competition, is...

Designed to resolve failed banks via loss-sharing by shareholders and creditors, bail-ins were introduced to substitute bailouts, which are known to create moral hazards in banks and a crisis in national finance. However, in cases wherein the majority of creditors are the general public,...

The revolving door practice, i.e. the recruitment of ex-regulators by regulated firms, has long been subject to criticism in Korea. Despite its importance, however, there are few studies on the economic impact of the revolving door. By applying a unique dataset of financial firms in Korea, it...

The contingent convertible bond (or CoCo) is designed as a bail-in tool, which is written down or converted to equity if the issuing bank is seriously troubled and thus its trigger is activated. The trigger could either be rule-based or discretion-based. I show theoretically that the bail-in is...

This paper provides a new theoretical rationale for public procurement for innovation (PPI), a unique policy encouraging public procurers to purchase innovative products. In contrast to existing studies that primarily emphasize the advantages of PPI, this paper takes a comprehensive approach,...

Does financial development contribute to economic growth? The literature finds that an expansion in financial resources is useful for economic growth if the degree of financial development is under a certain threshold; otherwise, the expansion is detrimental to growth. Almost every published...

Concerns prevail that a policy rate cut could weaken bank profitability and trigger financial instability. However, banks can sustain relatively high net interest margins with little fluctuation despite a rate cut owing to their dominant position in the deposit market and ability to adjust loan...

Over the past several decades, real estate project financing (PF) has repeatedly triggered economic disturbances in Korea, with no fundamental remedies in sight until now. Project sponsors are at the heart of this issue, investing minimal equity while heavily relying on guarantees from third...