The Optimal Leverage Ratio of Credit Guarantee Institution: Case of Local Credit Guarantee Foundation in South Korea*

IF 0.9 Q3 ECONOMICS

INTERNATIONAL ECONOMIC JOURNAL Pub Date : 2022-07-03 DOI:10.1080/10168737.2022.2100447

Hongkee Kim, Eui-hwan Park, Gyeahyung Jeon

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引用次数: 0

Abstract

This study aims to estimate the optimal leverage ratio of the Local Credit Guarantee Foundation (hereafter LCGF), which plays an important role in financing small and micro businesses in South Korea. The optimal leverage ratio refers to the rate of credit guarantee balance to capital at which the guarantee system can be soundly and stably operated while meeting the credit guarantee demand. The optimal leverage ratio of LCGF is derived using three methods: a sustainable budget constraint-based leverage ratio, an institutional objective maximizing leverage ratio, and a BIS ratio-based leverage ratio. Assuming that the average trend of the past ten years is maintained, the sustainable leverage ratio is evaluated to be 7.55. In addition, the institutional objective maximizing leverage ratio is estimated to be 7.24. When the optimal BIS ratio increases from 11.5% to 14%, the BIS ratio-based leverage ratio is evaluated to be between 8.39 and 10.21. The leverage ratio at the end of 2020, which was 9.16, is appropriate when using the BIS ratio, considering the COVID-19 crisis. However, it is judged to be slightly higher than the sustainable leverage ratio or the institutional objective maximizing leverage ratio.

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信用担保机构的最优杠杆率——以韩国地方信用担保基金会为例*

本研究旨在估计在韩国小微企业融资中发挥重要作用的地方信贷担保基金会（以下简称LCGF）的最佳杠杆率。最优杠杆率是指在满足信用担保需求的同时，担保体系能够健康稳定运行的信用担保余额与资本的比率。使用三种方法推导了LCGF的最优杠杆率：基于可持续预算约束的杠杆率、基于制度目标的杠杆率最大化和基于BIS比率的杠杆率。假设维持过去十年的平均趋势，可持续杠杆率评估为7.55。此外，机构目标最大化杠杆率估计为7.24。当最优BIS比率从11.5%增加到14%时，基于BIS比率的杠杆率被评估为在8.39和10.21之间。考虑到新冠肺炎危机，使用BIS比率时，2020年底的杠杆率为9.16是合适的。然而，它被判断为略高于可持续杠杆率或机构目标最大化杠杆率。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

INTERNATIONAL ECONOMIC JOURNAL Economics, Econometrics and Finance-Economics, Econometrics and Finance (all)

CiteScore

2.10

自引率

0.00%

发文量

期刊介绍： International Economic Journal is a peer-reviewed, scholarly journal devoted to publishing high-quality papers and sharing original economics research worldwide. We invite theoretical and empirical papers in the broadly-defined development and international economics areas. Papers in other sub-disciplines of economics (e.g., labor, public, money, macro, industrial organizations, health, environment and history) are also welcome if they contain international or cross-national dimensions in their scope and/or implications.