• Journal of the Korea Academia-Industrial cooperation Society
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• v.15 no.6
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• pp.3564-3570
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• 2014

This study assessed the validity of establishing and implementing a financial supervisory policy considering that Mutual finance's increase in deposits received raises the rate of loans in the process that the recent financial supervisory authorities applied various regulatory measures to mutual financial organizations. As a result of the analysis with a least squares regression model for the correlation between the rate of increase in the deposits received by Nonghyup Mutual Finance and the default rate of loans through the complete enumeration on the 1,161 the regional Nonghyup branches nationwide from 2005 to 2011, showed that there was no (+) correlation between them the financial supervisory authorities premised but a (-) relation. As Nonghyup is a mutual financial organization with the phenomenon that the application plan of increased deposits received is becoming diversified, the increase in deposits received helps reduce the procurement interest rate of funds, which provides a chance to apply the low interest of loans again, so they have positive effects on the overall loans. Financial Supervisory authorities should re-establish a direction of policy understanding the characteristics of Nonghyup's fund use and the detailed correlation between the rate of increase in deposits received and the default rate.