은행의 외화대출과 재무건전성

[Purpose]This paper analyzes the relationship between foreign currency loan and financial stability of Korean Banking industry and studies whether this relationship changes or not since the 2008 global financial crisis.
[Methodology]For this purpose, we described prior literature review and we examined the trends of foreign currency bank loans, equity ratio, and the size of bad bank loan. Using the quarterly data from the Bank of Korea and the Financial Supervisory Service, we made the panel data set including foreign currency loan ratio, equity ratio, etc.
[Findings]We found negative relationship between foreign currency loan and the financial stability of Korean banking industry. However, this relationship has significantly decreased since the 2008 global financial crisis.
[Implications]The foreign currency loan can make a negative impact on the financial stability of banks as the foreign currency volatility increases. The more stable foreign currency market can decrease the foreign currency loan losses. By the monitoring and regulation effects strengthened after the 2008 global financial crisis, foreign currency loan loss possibilities are decreased. This paper gives an additional contribution to the prior research area and policy implications by showing the relationship between foreign currency loan and bank financial stability.