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Korean J Financ Stud > Volume 48(4); 2019 > Article
Korean Journal of Financial Studies 2019;48(4):449-465.
DOI: https://doi.org/10.26845/KJFS.2019.    Published online August 31, 2019.
A Study on the Eligibility of Calligraphy Works for Collateral
Weon Young Ryu1, Min Kyung Ji2, KiHoon Hong2
1Senior Researcher, Public Policy Performance Evaluation Institute
2Assistant Professor, Hongik University
서예작품의 담보대출 적격성 분석
류원영1, 지민경2, 홍기훈2
2홍익대학교 조교수
Correspondence:  KiHoon Hong, Tel: +82-2-320-1757, Fax: +82-2-322-2293, 
Email: hong.jimmy@gmail.com
Received: 19 September 2018   • Revised: 21 May 2019   • Accepted: 28 June 2019
The objective of this paper is to empirically investigate whether calligraphies traded in Korean auction market qualify as a collateral of a bank loan. The number of Arts pieces traded in Korea is gradually increasing. The increase in transaction volume of art piece is likely to cause collateral loans of Arts in Korea to increase. Financial institutions in connection with PB are expanding such loans with growing number of wealthy individuals as their clients. However, in most case when art piece is provided as a collateral, only superficial information such as the past transaction price, and artist of the art piece is used to derive the value and the risk of the collateral loan asset. In general, most of financial institutions do not employ the basic tools of financial risk management. The implication of this study would be useful to financial practioners and collateral loan lenders. As a result, despite the growing number of works in the portfolio, the probability of bankruptcy increases rather than the number of works in the calligraphy portfolio. This means that the calligraphy portfolio does not have a diversification effect. Thus, Korean calligraphy works are not suitable for a collateral of a bank loan.
Key Words: Calligraphy, Arts, Secured Loan, VaR, Risk
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