• KDI Journal of Economic Policy
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• v.14 no.1
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• pp.89-119
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• 1992

This paper purports to analyze the economic rationale of compensating balance requirements and its impact on money supply. This practice has recently been severely criticized for artificially increasing the money supply and, therefore, limiting the nation's aggregate lending policy under the tight constraint of the given money supply target. A review of the existing literature implies that compensating balance requirements is a banking practice which leads to corrections in the distortion of financial resource allocation due to the imperfection of financial market stemming from asymmetric information and/or financial regulations on deposit and lending rates. Therefore, the economic rationale of this practice is deemed to improve the efficiency of financial resource allocation. On the other hand, the macroeconomic impact of compensating balance requirements on the money supply depends on the impact on the money multiplier, which in turn depends on the desired ratio of deposit that people wish to maintain on the money borrowed from the banking system, and on the desired reserve ratio that the banking system would like to hold for deposit withdrawal. If the compensating balance requirements could increase the desired ratio of deposit to borrowing (bank lending), it will increase the available amount of total reserve within the banking system and, in turn, the money multiplier. However, this channel has not been fully analyzed in the literature, and the direction of the effect is ambiguous. If the practice could reduce the turn-over rate of deposit and, thereby, reduce the desired reserve ratio of the banking system, then it will also increase the money multiplier. While this channel operates unambiguously toward increasing the money multiplier, this effect will be limited by the extent that the banking system holds the excess reserve over the required reserve because the excess reserve will set the maximum amount for the desired reserve to fall. This paper tries to determine the effect on the money supply by empirically estimating the multiplier and the desired ratio of deposit to lending equations as functions of the ratio of compensating balance to the related lending, which is not observable and is estimated for the regression purpose. The results suggest that the effect of compensating balance requirements on the money supply in Korea does not exist or is very tenuous even if it could operate. Therefore, this paper concludes that the well publicized policy of cross cancelling the compensating balance and the related lending will not be effective at controlling the money supply and increasing the amount of loans without expanding the money supply.

• KDI Journal of Economic Policy
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• v.32 no.4
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• pp.153-195
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• 2010

The recent global financial crisis has been the outcome of, among other things, the mismatch between institutions and the reality of the market in the current global financial system. The International financial institutions (IFIs) that were designed more than 60 years ago can no longer effectively meet the challenges posed by the current global economy. While the global financial market has become integrated like a single market, there is no international lender of last resort or global regulatory body. There also has been a rapid shift in the weight of economic power. The share of the Group of 7 (G7) countries in global gross domestic product (GDP) fell and the share of emerging market economies increased rapidly. Therefore, the tasks facing us today are: (i) to reform the IFIs -mandate, resources, management, and governance structure; (ii) to reform the system such as the international monetary system (IMS), and regulatory framework of the global financial system; and (iii) to reform global economic governance. The main focus of this paper will be the IMS reform and the role of the Group of Twenty (G20) summit meetings. The current IMS problems can be summarized as follows. First, the demand for foreign reserve accumulation has been increasing despite the movement from fixed exchange rate regimes to floating rate regimes some 40 years ago. Second, this increasing demand for foreign reserves has been concentrated in US dollar assets, especially public securities. Third, as the IMS relies too heavily on the supply of currency issued by a center country (the US), it gives an exorbitant privilege to this country, which can issue Treasury bills at the lowest possible interest rate in the international capital market. Fourth, as a related problem, the global financial system depends too heavily on the center country's ability to maintain the stability of the value of its currency and strength of its own financial system. Fifth, international capital flows have been distorted in the current IMS, from EMEs and developing countries where the productivity of capital investment is higher, to advanced economies, especially the US, where the return to capital investment is lower. Given these problems, there have been various proposals to reform the current IMS. They can be grouped into two: demand-side and supply-side reform. The key in the former is how to reduce the widespread strong demand for foreign reserve holdings among EMEs. There have been several proposals to reduce the self-insurance motivation. They include third-party insurance and the expansion of the opportunity to borrow from a global and regional reserve pool, or access to global lender of last resort (or something similar). However, the first option would be too costly. That leads us to the second option - building a stronger globalfinancial safety net. Discussions on supply-side reform of the IMS focus on how to diversify the supply of international reserve currency. The proposals include moving to a multiple currency system; increased allocation and wider use of special drawing rights (SDR); and creating a new global reserve currency. A key question is whether diversification should be encouraged among suitable existing currencies, or if it should be sought more with global reserve assets, acting as a complement or even substitute to existing ones. Each proposal has its pros and cons; they also face trade-offs between desirability and political feasibility. The transition would require close collaboration among the major players. This should include efforts at the least to strengthen policy coordination and collaboration among the major economies, and to reform the IMF to make it a more effective institution for bilateral and multilateral surveillance and as an international lender of last resort. The success on both fronts depends heavily on global economic governance reform and the role of the G20. The challenge is how to make the G20 effective. Without institutional innovations within the G20, there is a high risk that its summits will follow the path of previous summit meetings, such as G7/G8.

• Nuclear Medicine and Molecular Imaging
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• v.40 no.6
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• pp.293-301
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• 2006

Purpose: The aim of the study was to evaluate the hemodynamic changes after successful bypass surgery in patients with atherosclerotic stenosis in ICA using $^{99m}Tc-ECD$ SPECT. Materials and Methods: Fourteen patients (M:F=8:6, mean age; $60{\pm}9$ years) who underwent STA-MCA anastomosis for unilateral atherosclerotic cerebrovascular disease were enrolled. $^{99m}Tc-ECD$ basal/acetazolamide perfusion SPECT studies were performed before, 10 days and 6 months after bypass surgery. Perfusion reserve was defined as the % changes after acetazolamide over rest image. Regional cerebral blood flow and perfusion reserve were compared preoperative, early-postoperative and late-postoperative scans. Results: The mean resting perfusion and decrease in perfusion reserve in affected ICA territory on preoperative scan was $52.4{\pm}3.5\;and\;-7.9{\pm}4.7%$, respectively. The resting perfusion was significantly improved after surgery on early-postoperative scan (mean $53.7{\pm}2.7$) and late-postoperative scan (mean $53.3{\pm}2.5$) compared with preoperative images (p<0.05, respectively). Resting perfusion did not showed further improvement on late-postoperative scan compared with early-postoperative scan. The perfusion reserve was $-3.7{\pm}2.6%$ on early-postoperative scan, and $-1.6{\pm}2.3%$ on late-postoperative scan, which was significantly improved after surgery. Additionally, further improvement of perfusion reserved as observed on late-postoperative scan (p<0.05). While, in the unaffected ICA territory, no significant changes in the resting perfusion and perfusion reserve was observed. Conclusion: The improvement of resting perfusion and perfusion reserve in early-postoperative scan reflects the immediate restoration of the cerebral blood flow by bypass surgery. In contrasts, further improvement of perfusion reserve showing on late-postoperative scan may indicate a good collateral development after surgery, which may indicate good surgical outcome after surgery.

• Bulletin of the Korean Mathematical Society
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• v.14 no.1
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• pp.1-8
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• 1977

• Korean Medical Education Review
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• v.2 no.2
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• pp.59-71
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• 2001

• Proceedings of the KOSOMBE Conference
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• v.1997 no.05
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• pp.3-3
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• 1997

• Bulletin of the Korean Mathematical Society
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• v.13 no.2
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• pp.149.2-149.2
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• 1976

• 대한생식의학회:학술대회논문집
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• 2006.11a
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• pp.142.2-143
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• 2006

• Proceedings of the Microbiological Society of Korea Conference
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• 2006.05a
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• pp.20-21
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• 2006

• Proceedings of the Korean Society of Soil Zoology Conference
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• 1997.03a
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• pp.7-8
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• 1997