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Financial liberalization in the case of Korea

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Frame of Image tal movements IMF ☞ capital account liberalization
Benefits : increased channels of funding thereby lowering of the cost of funding, enhancement of competitiveness through the presence of foreign capital, financial efficiency by adapting to global standards
Problems : foreign dominance of domestic banks, etc., increase in vulnerability of domestic financial markets, increased chance of currency or financial crisis thru speculative capital movement
3
▶ Brief History of Capital Market Liberalization in Korea (I)
1984 : allowed foreigner’s stock investment thru specialized foreign investment fund company s Late 1980’s : restrictions on capital inflow due to current account urplus, liberalized current account transactions and entered as IMF clause 8 country 1992 : allowed direct holding of stocks by foreigners, regulation of current accounts changed to negative system 1994.12 : announced ‚Institutional Reform Plans on Foreign Exchange‛ 1996.12 : entered as a OECD country, but reserving codes of capital liberalization and implementing inflow of long term capital movements
4
▶ Brief History of Capital Market Liberalization in Korea (II)
1997.12 : abolished daily restraints of exchange rate movements → free-floating system 1998.5 : liberalized investments on short-term money market instruments and listed stocks 1998.6 : announced 2-stage capital account liberalization 1999.4 : ‘foreign exchange transaction law’ comes into effect, regulation of capital accounts changed to negative sy


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Title Financial liberalization in the case of Korea
Similar Titles
Material Type Reports
Author(English)

Lee, Yoonsok

Date 2007
Pages 41
Language English
File Type Documents
Original Format pdf
Subject Economy < Financial Policy
Holding KDI School of Public Policy and Management
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