Journal of the Architectural Institute of Korea (대한건축학회논문집)

Architectural Institute of Korea (대한건축학회)
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A Study on the Total Guarantee Limit for Construction-related financial cooperatives Using the VaR

VaR 모형을 이용한 건설관련 공제조합의 총보증한도 추정

  • Kim, Mi Ri (Korea Research Institute of Mechanical Facilities Industry) ;
  • Kim, Yongkyu (Division of Economics, Hanyang University ERICA Campus) ;
  • Park, Sun Gu (Korea Research Institute for Construction Policy)
  • 김미리 (대한기계설비산업연구원) ;
  • 김용규 (한양대학교 경상대학 경제학부) ;
  • 박선구 (대한건설정책연구원)
  • Received : 2024.01.15
  • Accepted : 2024.04.08
  • Published : 2024.04.30
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Abstract

In recent times, the construction guarantee market has experienced several transformations, including restructuring the construction production system and addressing the repayment of public funds by Seoul Guarantee Insurance. These changes are anticipated to shift the construction guarantee market structure from limited competition towards a more competitive environment. Consequently, there's an expected shift in the demand for guarantees from construction-related financial cooperatives. In response, these cooperatives must evaluate the provision of suitable guarantees. To address this, the study conducts an empirical analysis of the appropriate total guarantee limit for construction-related financial cooperatives, utilizing the Value at Risk model. This analysis suggested that the suitable total guarantee limit should range between two to four times higher than the current legally permitted multiples of 20 and 30 times for construction-related financial cooperatives. This underscores the necessity for a substantial increase in the total guarantee limit multiple for each cooperative. The significance of this study lies in being the first empirical analysis of the appropriate total guarantee limit for construction-related financial cooperatives. Additionally, it's noteworthy that the analysis employs the loss ratio scenario method, among the RBC internal model methods commonly used by private insurance companies.

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References

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