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Financial restructuring in Korea

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Frame of Image quidity expansion or partial improvement of the financial system was not effective. It was imperative to enhance the transparency of the financial sector and to formulate structural reform programs 1) both for rehabilitating the nation’s financial system and restoring the downgraded sovereign credit rating of Korea. From a long-term perspective, financial restructuring was required to secure financial stability by eliminating the fundamental causes of the financial crisis and to maximize the potential of economic growth of Korea by enhancing the efficiency and competitiveness of financial industry. Thus, financial restructuring was implemented not only to normalize the financial intermediation function and restore Korea's sovereign credit rating in the short run, but also to strengthen international competitiveness of the financial industry in the long run.
2. Underlying Principles of Financial Restructuring
Financial restructuring was pursued in accordance with fundamental principles as follows. First, financial restructuring and injection of public funds should be implemented to minimize costs. Under this principle, only viable financial institutions should be supported by the government, while non-viable ones should be resolved or liquidated. Secondly, the principle of self-accountability should be applied in the process of financial restructuring along with self-rescue efforts so as to prevent moral hazard arising in the course of resolving troubled financial institutions


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Title Financial restructuring in Korea
Similar Titles
Material Type Proceedings
Author(Korean)

조정환

Publisher

[Seoul] : Korea Development Institute

Date 2003
Event

Policy Advice on Enhancement of Tax Administration and Tax Policy Phase II

Pages 25
Subject Country South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Economy < Financial Policy
Holding KDI; KDI School
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