This study seeks to examine the changes implemented in the domestic and foreign financial settings, and prepare a general overview on how capital liberalization took place in Korea, thereby providing relevant information about Korea’s financial environment.
The environment of international finance has gone through a drastic change since the 1980s as the OPEC countries became debtors from capital providers. The economic recession of the developed countries and the resulting protectionism led to the weakening of developing countries. Meanwhile, the persistently high international interest rates led to an increased burden on the interest rates of foreign debt.
In terms of the cycle of international finance, the changes in the regional patterns and regulations in the domestic and international financial markets are also going through change in various perspectives. Setting aside local differences among countries, new trends are taking place around financial markets, the common ones being: alleviation of control regulations on foreign currencies; removal of interest rate ceilings; globalization of the financial market; tax reduction; and the expansion of business areas of specific financial institutions. Regardless of the differences in the nature of these changes, one thing is common—the changes have indeed brought about a wide structural change to both the domestic and international financial markets.
Among the changes that brought innovation into the international financial market, the most significant factors recognized are internationalization, liberalization, and securitization. These innovations led to the development of information and communication technologies (ICTs), which in turn brought about the development of a 24-hour operating payment system. In addition, the speed of delivering information greatly increased, which in turn created a diversity of new financial products.
In this context, the study examines the development progress of capital liberalization that continuously took place since the 1980s. Then it conducts a theoretical and positive verification of the integration of the local and foreign capital markets developed through liberalization, thereby identifying their practical impact on economic variables. Furthermore, the study conducts case studies in order to draw out policy implications from the development process of capital liberalization. In order for Korea to maximize the positive effects of capital liberalization and minimize its side effects, the local economic conditions need to be improved in order to develop a receptive attitude towards these new trends.
자본자유화의 영향과 정책대응에 관한 연구(Study on the impacts and countermeasure of capital liberalization)
[서울] : 한국금융연구원
|Series Title; No||연구보고서|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Financial Policy|
|Holding||한국금융연구원; KDI 국제정책대학원|