The corporate and financial sectors, which lay at the core of the 1997 crisis, have evolved significantly in recent years. The corporate sector is still in the process of restructuring in the wake of several important changes, including stronger competitive pressures, a new corporate governance framework and more independent financial institutions. Of the top 30 chaebol in 1997, seventeen have entered legal bankruptcy procedures or been forced into workout programmes, including Daewoo, which was the second largest group. A number of others lost major subsidiaries. The surviving chaebol have substantially reduced debt; the average debt-toequity ratio has fallen to 116 per cent from more than 500 per cent at the time of the crisis. The improved financial health of the corporate sector has had beneficial ...