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The Influences of Coastal Upwelling on Phytoplankton Community in the Southern Part of East Sea, Korea (동해 남부 연안 해역에서 냉수대 발생이 식물플랑크톤 군집에 미치는 영향)

  • Kim, A-Ram;Youn, Seok-Hyun;Chung, Mi-Hee;Yoon, Sang-Chol;Moon, Chang-Ho
    • The Sea:JOURNAL OF THE KOREAN SOCIETY OF OCEANOGRAPHY
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    • v.19 no.4
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    • pp.287-301
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    • 2014
  • In order to understand environment condition and phytoplankton community before and after coastal upwelling, the influences of upwelling events on phytoplankton community were studied at 18 stations located the Southern part of East Sea, Korea from May to August 2013. The surface water masses showed low temperature and high salinity due to upwelling events at coastal stations (A1, B1, C1). Correlation between temperature and nutrients (DIP, r=-0.218, p<0.01; DIN, r=-0.306, p<0.01; silicate, r=-0.274, p<0.01) was significantly negative. This result could be explained that nutrients were supplied to surface water by the upwelling of bottom water. Phytoplankton communities were composed of 186 species. Phytoplankton abundance were relatively high in May (C1, $726{\times}10^3cells\;L^{-1}$) and July (A1, $539{\times}10^3cells\;L^{-1}$). Total chlorophyll a and micro-size fraction ($&gt;20{\mu}m$) increased at coastal stations in July and August, while phytoplankton abundance and total chl. a was much low in June. Dominant species in June was Pseudo-nitzschia spp. of which the cell size was $309{\mu}m^3$. Cell size of Pseudo-nitzschia spp. was smaller than dominant species in other period. Therefore, the increase in total chloro-phyll a and the size of phytoplankton was resulted in the sufficient supply of nutrients. In contrast, these tendencies were not observed at outside stations. These results suggested that coastal upwelling was an important influencing factor to determine the species composition and standing stock of phytoplankton community in the coastal waters of the Southern part of East Sea, Korea.

Animal Infectious Diseases Prevention through Big Data and Deep Learning (빅데이터와 딥러닝을 활용한 동물 감염병 확산 차단)

  • Kim, Sung Hyun;Choi, Joon Ki;Kim, Jae Seok;Jang, Ah Reum;Lee, Jae Ho;Cha, Kyung Jin;Lee, Sang Won
    • Journal of Intelligence and Information Systems
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    • v.24 no.4
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    • pp.137-154
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    • 2018
  • Animal infectious diseases, such as avian influenza and foot and mouth disease, occur almost every year and cause huge economic and social damage to the country. In order to prevent this, the anti-quarantine authorities have tried various human and material endeavors, but the infectious diseases have continued to occur. Avian influenza is known to be developed in 1878 and it rose as a national issue due to its high lethality. Food and mouth disease is considered as most critical animal infectious disease internationally. In a nation where this disease has not been spread, food and mouth disease is recognized as economic disease or political disease because it restricts international trade by making it complex to import processed and non-processed live stock, and also quarantine is costly. In a society where whole nation is connected by zone of life, there is no way to prevent the spread of infectious disease fully. Hence, there is a need to be aware of occurrence of the disease and to take action before it is distributed. Epidemiological investigation on definite diagnosis target is implemented and measures are taken to prevent the spread of disease according to the investigation results, simultaneously with the confirmation of both human infectious disease and animal infectious disease. The foundation of epidemiological investigation is figuring out to where one has been, and whom he or she has met. In a data perspective, this can be defined as an action taken to predict the cause of disease outbreak, outbreak location, and future infection, by collecting and analyzing geographic data and relation data. Recently, an attempt has been made to develop a prediction model of infectious disease by using Big Data and deep learning technology, but there is no active research on model building studies and case reports. KT and the Ministry of Science and ICT have been carrying out big data projects since 2014 as part of national R &D projects to analyze and predict the route of livestock related vehicles. To prevent animal infectious diseases, the researchers first developed a prediction model based on a regression analysis using vehicle movement data. After that, more accurate prediction model was constructed using machine learning algorithms such as Logistic Regression, Lasso, Support Vector Machine and Random Forest. In particular, the prediction model for 2017 added the risk of diffusion to the facilities, and the performance of the model was improved by considering the hyper-parameters of the modeling in various ways. Confusion Matrix and ROC Curve show that the model constructed in 2017 is superior to the machine learning model. The difference between the2016 model and the 2017 model is that visiting information on facilities such as feed factory and slaughter house, and information on bird livestock, which was limited to chicken and duck but now expanded to goose and quail, has been used for analysis in the later model. In addition, an explanation of the results was added to help the authorities in making decisions and to establish a basis for persuading stakeholders in 2017. This study reports an animal infectious disease prevention system which is constructed on the basis of hazardous vehicle movement, farm and environment Big Data. The significance of this study is that it describes the evolution process of the prediction model using Big Data which is used in the field and the model is expected to be more complete if the form of viruses is put into consideration. This will contribute to data utilization and analysis model development in related field. In addition, we expect that the system constructed in this study will provide more preventive and effective prevention.

Mapping and Assessment of Forest Biomass Resources in Korea (우리나라 산림 바이오매스 자원량 평가 및 지도화)

  • Son, Yeong Mo;Lee, Sun Jeoung;Kim, Sowon;Hwang, Jeong Sun;Kim, Raehyun;Park, Hyun
    • Journal of Korean Society of Forest Science
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    • v.103 no.3
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    • pp.431-438
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    • 2014
  • This study was conducted to assess forest biomass resource which is a carbon sink and a renewable resource in Korea. The total forest biomass resource potential was 804 million tons, and conifers, broadleaved forest and mixed forest accounted for 265 million tons, 282 million tons, and 257 million tons, respectively. Proportionately to regional forest stocks, biomass potential of Gangwon-do had most biomass potential, followed by Gyeongsangbuk-do and Gyeongsangnam-do. The woody biomass from the byproduct of sawn timber in commercial harvesting was 707 thousand ton/year, and that from the byproduct of forest tending was 592 thousand ton/year. The amount resulted in about 1,300 thousand ton/year of potential supplies from forest biomass resource into the energy market. It's tonnage of oil equivalent(toe) was 585 thousand ton/year. In this study, we developed a program (BiomassMap V2.0) for forest biomass resource mapping. Used system to develop this program was Microsoft Office Excel, Microsoft Office Access ArcGIS and Microsoft Visual Basic 6.0. Additionally, This program made use of tool such as ESRI MapObjects2.1 in order to take advantage of spatial information. This program shows the map of total biomass stock, annual biomass growth at forest land in Korea, and biomass production from forest tending and commercial harvesting. The information can also be managed by the program. The biomass resource map can be identified by regional and forest type for the purpose of utilization. So, we expect the map and program to be very useful for forest managers in the near future.

A Study on the Improvement of Sub-divided Land Cover Map Classification System - Based on the Land Cover Map by Ministry of Environment - (세분류 토지피복지도 분류체계 개선방안 연구 - 환경부 토지피복지도를 중심으로 -)

  • Oh, Kwan-Young;Lee, Moung-Jin;No, Woo-Young
    • Korean Journal of Remote Sensing
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    • v.32 no.2
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    • pp.105-118
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    • 2016
  • The purpose of this study is to improve the classification system of sub-divided land cover map among the land cover maps provided by the Ministry of Environment. To accomplish the purpose, first, the overseas country land cover map classification items were examined in priority. Second, the area ratio of each item established by applying the previous sub-divided classification system was analyzed. Third, the survey on the improvement of classification system targeting the users (experts and general public) who actually used the sub-divided land cover map was carried out. Fourth, a new classification system which improved the previous system by reclassifying 41 classification items into 33 items was finally established. Fifth, the established land cover classification items were applied on study area, and the land cover classification result according to the improvement method was compared with the previous classification system. Ilsan area in Goyang city where there are diverse geographic features with various land surface characteristics such as the urbanization area and agricultural land were distributed evenly were selected as the study area. The basic images used in this study were 0.25 m aerial ortho-photographs captured by the National Geographic Information Institute (NGII), and digital topographic map, detailed stock map plan, land registration map and administrative area map were used as the relevant reference data. As a result of applying the improved classification system into the study area, the area of culture-sports, leisure facilities was $1.84km^2$ which was approximately more than twice larger in comparison to the previous classification system. Other areas such as transportation and communication system and educational administration facilities were not classified. The result of this study has meaningful significance that it reflects the efficiency for the establishment and renewal of sub-divided land cover map in the future and actual users' needs.

Development of a Detection Model for the Companies Designated as Administrative Issue in KOSDAQ Market (KOSDAQ 시장의 관리종목 지정 탐지 모형 개발)

  • Shin, Dong-In;Kwahk, Kee-Young
    • Journal of Intelligence and Information Systems
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    • v.24 no.3
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    • pp.157-176
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    • 2018
  • The purpose of this research is to develop a detection model for companies designated as administrative issue in KOSDAQ market using financial data. Administration issue designates the companies with high potential for delisting, which gives them time to overcome the reasons for the delisting under certain restrictions of the Korean stock market. It acts as an alarm to inform investors and market participants of which companies are likely to be delisted and warns them to make safe investments. Despite this importance, there are relatively few studies on administration issues prediction model in comparison with the lots of studies on bankruptcy prediction model. Therefore, this study develops and verifies the detection model of the companies designated as administrative issue using financial data of KOSDAQ companies. In this study, logistic regression and decision tree are proposed as the data mining models for detecting administrative issues. According to the results of the analysis, the logistic regression model predicted the companies designated as administrative issue using three variables - ROE(Earnings before tax), Cash flows/Shareholder's equity, and Asset turnover ratio, and its overall accuracy was 86% for the validation dataset. The decision tree (Classification and Regression Trees, CART) model applied the classification rules using Cash flows/Total assets and ROA(Net income), and the overall accuracy reached 87%. Implications of the financial indictors selected in our logistic regression and decision tree models are as follows. First, ROE(Earnings before tax) in the logistic detection model shows the profit and loss of the business segment that will continue without including the revenue and expenses of the discontinued business. Therefore, the weakening of the variable means that the competitiveness of the core business is weakened. If a large part of the profits is generated from one-off profit, it is very likely that the deterioration of business management is further intensified. As the ROE of a KOSDAQ company decreases significantly, it is highly likely that the company can be delisted. Second, cash flows to shareholder's equity represents that the firm's ability to generate cash flow under the condition that the financial condition of the subsidiary company is excluded. In other words, the weakening of the management capacity of the parent company, excluding the subsidiary's competence, can be a main reason for the increase of the possibility of administrative issue designation. Third, low asset turnover ratio means that current assets and non-current assets are ineffectively used by corporation, or that asset investment by corporation is excessive. If the asset turnover ratio of a KOSDAQ-listed company decreases, it is necessary to examine in detail corporate activities from various perspectives such as weakening sales or increasing or decreasing inventories of company. Cash flow / total assets, a variable selected by the decision tree detection model, is a key indicator of the company's cash condition and its ability to generate cash from operating activities. Cash flow indicates whether a firm can perform its main activities(maintaining its operating ability, repaying debts, paying dividends and making new investments) without relying on external financial resources. Therefore, if the index of the variable is negative(-), it indicates the possibility that a company has serious problems in business activities. If the cash flow from operating activities of a specific company is smaller than the net profit, it means that the net profit has not been cashed, indicating that there is a serious problem in managing the trade receivables and inventory assets of the company. Therefore, it can be understood that as the cash flows / total assets decrease, the probability of administrative issue designation and the probability of delisting are increased. In summary, the logistic regression-based detection model in this study was found to be affected by the company's financial activities including ROE(Earnings before tax). However, decision tree-based detection model predicts the designation based on the cash flows of the company.

Accounting Conservatism and Excess Executive Compensation (회계 보수주의와 경영자 초과보상)

  • Byun, Seol-Won;Park, Sang-Bong
    • Management & Information Systems Review
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    • v.37 no.2
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    • pp.187-207
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    • 2018
  • This study examines the negative relationship between accounting conservatism and excess executive compensation and examines whether their relationship increases as managerial incentive compensation intensity increases. For this purpose, a total of 2,755 company-years were selected for the analysis of the companies listed on the Korea Stock Exchange from December 2012 to 2016 as the final sample. The results of this study are as follows. First, there is a statistically significant negative relationship between accounting conservatism and manager overpayment. This implies that managers' incentives to distort future cash flow estimates by over booking assets or accounting profits in order to maximize their compensation when manager compensation is linked to firm performance. In this sense, accounting conservatism can reduce opportunistic behavior by restricting managerial accounting choices, which can be interpreted as a reduction in overpayment to managers. Second, we found that the relationship between accounting conservatism and excess executive compensation increases with the incentive compensation for accounting performance. The higher the managerial incentive compensation intensity of accounting performance is, the more likely it is that the manager has the incentive to make earnings adjustments. Therefore, the high level of incentive compensation for accounting performance means that the ex post settling up problem due to over-compensation can become serious. In this case, the higher the managerial incentive compensation intensity for accounting performance, the greater the role and utility of conservatism in manager compensation contracts. This study is based on the fact that it presents empirical evidence on the usefulness of accounting conservatism in managerial compensation contracts theoretically presented by Watts (2003) and the additional basis that conservatism can be used as a useful tool for investment decision.

Visualizing the Results of Opinion Mining from Social Media Contents: Case Study of a Noodle Company (소셜미디어 콘텐츠의 오피니언 마이닝결과 시각화: N라면 사례 분석 연구)

  • Kim, Yoosin;Kwon, Do Young;Jeong, Seung Ryul
    • Journal of Intelligence and Information Systems
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    • v.20 no.4
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    • pp.89-105
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    • 2014
  • After emergence of Internet, social media with highly interactive Web 2.0 applications has provided very user friendly means for consumers and companies to communicate with each other. Users have routinely published contents involving their opinions and interests in social media such as blogs, forums, chatting rooms, and discussion boards, and the contents are released real-time in the Internet. For that reason, many researchers and marketers regard social media contents as the source of information for business analytics to develop business insights, and many studies have reported results on mining business intelligence from Social media content. In particular, opinion mining and sentiment analysis, as a technique to extract, classify, understand, and assess the opinions implicit in text contents, are frequently applied into social media content analysis because it emphasizes determining sentiment polarity and extracting authors' opinions. A number of frameworks, methods, techniques and tools have been presented by these researchers. However, we have found some weaknesses from their methods which are often technically complicated and are not sufficiently user-friendly for helping business decisions and planning. In this study, we attempted to formulate a more comprehensive and practical approach to conduct opinion mining with visual deliverables. First, we described the entire cycle of practical opinion mining using Social media content from the initial data gathering stage to the final presentation session. Our proposed approach to opinion mining consists of four phases: collecting, qualifying, analyzing, and visualizing. In the first phase, analysts have to choose target social media. Each target media requires different ways for analysts to gain access. There are open-API, searching tools, DB2DB interface, purchasing contents, and so son. Second phase is pre-processing to generate useful materials for meaningful analysis. If we do not remove garbage data, results of social media analysis will not provide meaningful and useful business insights. To clean social media data, natural language processing techniques should be applied. The next step is the opinion mining phase where the cleansed social media content set is to be analyzed. The qualified data set includes not only user-generated contents but also content identification information such as creation date, author name, user id, content id, hit counts, review or reply, favorite, etc. Depending on the purpose of the analysis, researchers or data analysts can select a suitable mining tool. Topic extraction and buzz analysis are usually related to market trends analysis, while sentiment analysis is utilized to conduct reputation analysis. There are also various applications, such as stock prediction, product recommendation, sales forecasting, and so on. The last phase is visualization and presentation of analysis results. The major focus and purpose of this phase are to explain results of analysis and help users to comprehend its meaning. Therefore, to the extent possible, deliverables from this phase should be made simple, clear and easy to understand, rather than complex and flashy. To illustrate our approach, we conducted a case study on a leading Korean instant noodle company. We targeted the leading company, NS Food, with 66.5% of market share; the firm has kept No. 1 position in the Korean "Ramen" business for several decades. We collected a total of 11,869 pieces of contents including blogs, forum contents and news articles. After collecting social media content data, we generated instant noodle business specific language resources for data manipulation and analysis using natural language processing. In addition, we tried to classify contents in more detail categories such as marketing features, environment, reputation, etc. In those phase, we used free ware software programs such as TM, KoNLP, ggplot2 and plyr packages in R project. As the result, we presented several useful visualization outputs like domain specific lexicons, volume and sentiment graphs, topic word cloud, heat maps, valence tree map, and other visualized images to provide vivid, full-colored examples using open library software packages of the R project. Business actors can quickly detect areas by a swift glance that are weak, strong, positive, negative, quiet or loud. Heat map is able to explain movement of sentiment or volume in categories and time matrix which shows density of color on time periods. Valence tree map, one of the most comprehensive and holistic visualization models, should be very helpful for analysts and decision makers to quickly understand the "big picture" business situation with a hierarchical structure since tree-map can present buzz volume and sentiment with a visualized result in a certain period. This case study offers real-world business insights from market sensing which would demonstrate to practical-minded business users how they can use these types of results for timely decision making in response to on-going changes in the market. We believe our approach can provide practical and reliable guide to opinion mining with visualized results that are immediately useful, not just in food industry but in other industries as well.

A Study on the Critical Success Factors of Social Commerce through the Analysis of the Perception Gap between the Service Providers and the Users: Focused on Ticket Monster in Korea (서비스제공자와 사용자의 인식차이 분석을 통한 소셜커머스 핵심성공요인에 대한 연구: 한국의 티켓몬스터 중심으로)

  • Kim, Il Jung;Lee, Dae Chul;Lim, Gyoo Gun
    • Asia pacific journal of information systems
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    • v.24 no.2
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    • pp.211-232
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    • 2014
  • Recently, there is a growing interest toward social commerce using SNS(Social Networking Service), and the size of its market is also expanding due to popularization of smart phones, tablet PCs and other smart devices. Accordingly, various studies have been attempted but it is shown that most of the previous studies have been conducted from perspectives of the users. The purpose of this study is to derive user-centered CSF(Critical Success Factor) of social commerce from the previous studies and analyze the CSF perception gap between social commerce service providers and users. The CSF perception gap between two groups shows that there is a difference between ideal images the service providers hope for and the actual image the service users have on social commerce companies. This study provides effective improvement directions for social commerce companies by presenting current business problems and its solution plans. For this, This study selected Korea's representative social commerce business Ticket Monster, which is dominant in sales and staff size together with its excellent funding power through M&A by stock exchange with the US social commerce business Living Social with Amazon.com as a shareholder in August, 2011, as a target group of social commerce service provider. we have gathered questionnaires from both service providers and the users from October 22, 2012 until October 31, 2012 to conduct an empirical analysis. We surveyed 160 service providers of Ticket Monster We also surveyed 160 social commerce users who have experienced in using Ticket Monster service. Out of 320 surveys, 20 questionaries which were unfit or undependable were discarded. Consequently the remaining 300(service provider 150, user 150)were used for this empirical study. The statistics were analyzed using SPSS 12.0. Implications of the empirical analysis result of this study are as follows: First of all, There are order differences in the importance of social commerce CSF between two groups. While service providers regard Price Economic as the most important CSF influencing purchasing intention, the users regard 'Trust' as the most important CSF influencing purchasing intention. This means that the service providers have to utilize the unique strong point of social commerce which make the customers be trusted rathe than just focusing on selling product at a discounted price. It means that service Providers need to enhance effective communication skills by using SNS and play a vital role as a trusted adviser who provides curation services and explains the value of products through information filtering. Also, they need to pay attention to preventing consumer damages from deceptive and false advertising. service providers have to create the detailed reward system in case of a consumer damages caused by above problems. It can make strong ties with customers. Second, both service providers and users tend to consider that social commerce CSF influencing purchasing intention are Price Economic, Utility, Trust, and Word of Mouth Effect. Accordingly, it can be learned that users are expecting the benefit from the aspect of prices and economy when using social commerce, and service providers should be able to suggest the individualized discount benefit through diverse methods using social network service. Looking into it from the aspect of usefulness, service providers are required to get users to be cognizant of time-saving, efficiency, and convenience when they are using social commerce. Therefore, it is necessary to increase the usefulness of social commerce through the introduction of a new management strategy, such as intensification of search engine of the Website, facilitation in payment through shopping basket, and package distribution. Trust, as mentioned before, is the most important variable in consumers' mind, so it should definitely be managed for sustainable management. If the trust in social commerce should fall due to consumers' damage case due to false and puffery advertising forgeries, it could have a negative influence on the image of the social commerce industry in general. Instead of advertising with famous celebrities and using a bombastic amount of money on marketing expenses, the social commerce industry should be able to use the word of mouth effect between users by making use of the social network service, the major marketing method of initial social commerce. The word of mouth effect occurring from consumers' spontaneous self-marketer's duty performance can bring not only reduction effect in advertising cost to a service provider but it can also prepare the basis of discounted price suggestion to consumers; in this context, the word of mouth effect should be managed as the CSF of social commerce. Third, Trade safety was not derived as one of the CSF. Recently, with e-commerce like social commerce and Internet shopping increasing in a variety of methods, the importance of trade safety on the Internet also increases, but in this study result, trade safety wasn't evaluated as CSF of social commerce by both groups. This study judges that it's because both service provider groups and user group are perceiving that there is a reliable PG(Payment Gateway) which acts for e-payment of Internet transaction. Accordingly, it is understood that both two groups feel that social commerce can have a corporate identity by website and differentiation in products and services in sales, but don't feel a big difference by business in case of e-payment system. In other words, trade safety should be perceived as natural, basic universal service. Fourth, it's necessary that service providers should intensify the communication with users by making use of social network service which is the major marketing method of social commerce and should be able to use the word of mouth effect between users. The word of mouth effect occurring from consumers' spontaneous self- marketer's duty performance can bring not only reduction effect in advertising cost to a service provider but it can also prepare the basis of discounted price suggestion to consumers. in this context, it is judged that the word of mouth effect should be managed as CSF of social commerce. In this paper, the characteristics of social commerce are limited as five independent variables, however, if an additional study is proceeded with more various independent variables, more in-depth study results will be derived. In addition, this research targets social commerce service providers and the users, however, in the consideration of the fact that social commerce is a two-sided market, drawing CSF through an analysis of perception gap between social commerce service providers and its advertisement clients would be worth to be dealt with in a follow-up study.

Evaluation on the Immunization Module of Non-chart System in Private Clinic for Development of Internet Information System of National Immunization Programme m Korea (국가 예방접종 인터넷정보시스템 개발을 위한 의원정보시스템의 예방접종 모듈 평가연구)

  • Lee, Moo-Sik;Lee, Kun-Sei;Lee, Seok-Gu;Shin, Eui-Chul;Kim, Keon-Yeop;Na, Bak-Ju;Hong, Jee-Young;Kim, Yun-Jeong;Park, Sook-Kyung;Kim, Bo-Kyung;Kwon, Yun-Hyung;Kim, Young-Taek
    • Journal of agricultural medicine and community health
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    • v.29 no.1
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    • pp.65-75
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    • 2004
  • Objectives: Immunizations have been one of the most effective measures preventing from infectious diseases. It is quite important national infectious disease prevention policy to keep the immunizations rate high and monitor the immunizations rate continuously. To do this, Korean CDC introduced the National Immunization Registry Program(NIRP) which has been implementing since 2000 at the Public Health Centers(PHC). The National Immunization Registry Program will be near completed after sharing, connecting and transfering vaccination data between public and private sector. The aims of this study was to evaluate the immunization module of non-chart system in private clinic with health information system of public health center(made by POSDATA Co., LTD) and immunization registry program(made by BIT Computer Co., LTD). Methods: The analysis and survey were done by specialists in medical, health field, and health information fields from 2001. November to 2002. January. We made the analysis and recommendation about the immunization module of non-chart system in private clinic. Results and Conclusions: To make improvement on immunization module, the system will be revised on various function like receipt and registration, preliminary medical examination, reference and inquiry, registration of vaccine, print-out various sheet, function of transfer vaccination data, issue function of vaccination certification, function of reminder and recall, function of statistical calculation, and management of vaccine stock. There are needs of an accurate assessment of current immunization module on each private non-chart system. And further studies will be necessary to make it an accurate system under changing health policy related national immunization program. We hope that the result of this study may contribute to establish the National Immunization Registry Program.

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An Overview of Readjustment Measures Against the Banking Industry's Non-Performing Loans (은행부실채권(銀行不實債權) 정리방안(整理方案)에 대한 고찰(考察))

  • Kim, Joon-kyung
    • KDI Journal of Economic Policy
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    • v.13 no.1
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    • pp.35-63
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    • 1991
  • Currently, Korea's banking industry holds a sizable amount of non-performing loans which stem from the government-led bailout of many troubled firms in the 1980s. Although this burden was somewhat relieved with the aid of banks' recapitalization in the booming securities market between 1986-88, the insolvent credits still resulted in low profitability in the banking sector and have been detrimental to the progress of financial liberalization and internationalization. This paper surveys the corporate bailout experiences of major advanced countries and Korea in the past and derives a rationale for readjustment measures against non-performing loans, in which rescue plans depend on the nature of the financial system. Considering the features of Korea's financial system and the banking sector's recent performance, it discusses possible means of liquidation in keeping with the rationale. The conflict of interests among parties involved in non-performing loans is widely known as one of the major constraints in writing off the loans. Specifically, in the case of Korea, the government's excessive intervention in allocating credits has preempted the legitimate role of the banking sector, which now only passively manages its past loans, and has implicitly confused private with public risk. This paper argues that to minimize the incidence of insolvent loan readjustment, the government's role should be reduced and that the correspondent banks should be more active in the liquidation process, through the market mechanism, reflecting their access to detailed information on the troubled firms. One solution is that banks, after classifying the insolvent loans by the lateness or possibility of repayment, would swap the relatively sound loans for preferred stock and gradually write off the bad ones by expanding the banks' retained earnings and revaluing the banks' assets. Specifically, the debt-equity swap can benefit both creditors and debtors in the sense that it raises the liquidity and profitability of bank assets and strengthens the debtor's financial structure by easing the debt service burden. Such a creditor-led or market-led solution improves the financial strength and autonomy of the banking sector, thereby fostering more efficient resource allocation and risk sharing.

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