The purpose of this research is to find ways to deal with the current economy, based on the analysis of financial integration within the European Community (EC) and its effects on South Korea. This is accomplished through examination of the content of the financial integration of the European Community and the response of financial companies both inside and outside the European Community.
There has been rapid progress in the financial integration of the European Community after they announced the white paper which discusses market integration within the community in 1985. Once the integration of financial markets in Europe is complete, the EC will emerge as one of the largest single economic entities, second only to the United States, and will dramatically affect other countries.
While the financial system and the structure of the financial market of the world powers—including Europe, Japan, and the U.S.—is rapidly changing due to financial innovation, highly competitive financial markets, and the globalization, securitization, and liberalization of the financial market, the EU established an integrated financial policy. This was accomplished according to the white paper on the completion of the internal market, which the Commission forwarded to the European council, and the Treaty of Rome (1957). The white paper aimed to introduce a single EC-wide banking license system and the principle of mutual recognition. As stated in the white paper, mutual recognition of financial services and procedures and qualifications of EC member states are listed and approved. This has become a major turning point in EC policy-making, and will further influence the banking sector and other fields as well.
Meanwhile, the single EC-wide banking license system will promote financial liberalization within the member states. Foreign banks were able to gain competitive advantages over domestic banks, and domestic supervisory agencies have no choice but to eventually ease regulations in order to protect domestic banks.
European financial integration polices appear to have an enormous effect on the international trade order of financial services, regarding the principle of reciprocity toward other countries. In the long run, due to greater competition between markets, regulations of the member states will naturally combine.
Financial companies in South Korea stand a chance within the area as a local corporation and should gradually open its domestic financial market, based on the principle of reciprocity. Korea must adopt the advanced financing and investment techniques of Europe, and by importing these specific techniques, attempt a real economy and institute financial internationalization. Furthermore, in order to develop, considering the financial market environment and financial internationalization, financial companies must restructure and reconsider their business strategies. In addition, authorities must support these acts by reducing and improving such regulations.
EC금융통합과 우리의 대응방안(EC financial integration and the countermeasures of South Korea)
서울 : 대외경제정책연구원
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Financial Policy|
|Holding||대외경제정책연구원; 한국개발연구원 국제정책대학원|