콘텐츠 바로가기
로그인
컨텐츠

Category Open

Resources

tutorial

Collection of research papers and materials on development issues

home

Resources
Economy Financial Policy
Economy Direct Investment

Print

Capital account liberalization and financial instability : The case of Korea

Related Document
Frame of Image te 2000 while financial and corporate sector restructuring are yet to be completed. Moreover social impacts of the crisis are expected to persist for the coming years. 2. Having said that, we must ask ourselves what went wrong? Of course there is a myriad of considerations that arise in attempting to answer this question. In this presentation, I will specifically focus on the modality of Korea’s capital account liberalization before the crisis and discuss how financial instability arose, and then present my views on the lessons that can be drawn from Korea’s experiences.
II. Korea’s Capital Account Liberalization
Background 1. Prior to the 1990s, Korea’s policies on capital account liberalization were pursued in a passive manner and largely in relation to the developments in the external current account. In the first half of the 1980s, various liberalization measures were taken to induce capital inflows for the purpose of financing current account deficits. At the same time, the Korean government encouraged domestic banks to borrow from abroad. As a result, Korea saw significant net capital inflows, most of which consisted of bank borrowings (Figure 1). However, in the late 1980s, the policy stance toward capital flows changed dramatically as the current account balance began to show a large surplus. Instead of allowing the domestic currency to appreciate, the government resorted to direct capital control in an effort to manage the overall external balance. Commercial loans b


Full Text
Title Capital account liberalization and financial instability
Similar Titles
Sub Title

The case of Korea

Material Type Reports
Author(English)

Shin, Inseok

Publisher

[Seoul]:Korea Development Institute

Date 2001
Pages 13
Subject Country South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Economy < Financial Policy
Economy < Direct Investment
Holding Korea Development Institute