Chaebol General Motors and Renault. The chaebol debts were not only to state industrial banks but also to independent banks and their own financial services subsidiaries. The scale of the loan defaults meant that banks could neither foreclose nor write off bad loans without themselves collapsing, so the failure to service these debts quickly caused a systemic banking crisis, and South Korea turned to the IMF for assistance. The most spectacular example came in mid-1999, with the collapse of the Daewoo Group, which had some US$80 billion in unpaid debt. At the time, it was the largest corporate bankruptcy in history.
Chaebol streams from overseas. All but 3 of the top 50 firms listed on the Korean Stock Exchange are designated as chaebol. Consequently, the chaebol have more bargaining power and oftentimes takes pricing action that squeezes both suppliers and consumers. Typically the firms down the supply chain fail to increase their profit margins enough to expand and thus never see growth. Collusion among the chaebol is commonplace. Price-fixing acts mean consumers expect to pay an inflated value for most goods and services. For instance, in 2012 Samsung and LG Electronics were fined for colluding to raise prices for home appliances. Since