By the latter part of 1998, the financial system of South Korea (the tenth largest economy in the world) was basically insolvent. Many banks failed as bad loans mounted. Capital flight so reduced Korea’s foreign exchange reserves that the country was teetering on the verge of defaulting on its sovereign debt obligations. Korea had to request an emergency funding from the International Monetary Fund or IMF, which, working closely with the US Federal Reserve, eventually provided the country with a $58 billion rescue package.
The package came with some strings attached, one of which was for the Korean government to sell
Source URL: https://www.foreignaffairs.com/south-korea/i-bought-bad-bank-here-how-united-states-should-too