Note 2-41

(41) In South Korea, Malaysia, Thailand and other countries affected by the financial crisis, governments took the initiative in creating arbitration committees to develop guidelines for out-of-court workout. Government involvement, though taking various forms, was very positive in these countries. As a result, massive NPLs were disposed of through out-of-court workout (see Appended Table 2-2). One reason for the dominant use of out-of-court workout in these countries may be that bankruptcy and other legal procedures, though developed to some extent even before the crisis, were costly and inefficient. Another reason may be that governments promoted out-of-court workout primarily.