This document was published in August 1967 as part of the research data from the Ministry of Finance. Financial stability was most necessary after independence from Japanese rule, when the foundations of industry were destroyed in the Korean War. Since the first research paper was published in 1957, continuous revision has been made, and effort to make the results easier to understand was made at the direction of Deok-jin Jang, the first manager of the Financial Management Department of the Ministry of Finance. Jang wrote that he had focused on objective data, excluding subjective judgment so that the research can be used as a basis for the stable management of national finances in the long term.
Consisting of nine chapters, this paper contains plans created in the beginning of the establishment of the Korean government, such as the Financial Stabilization Program (as well as its development process), 15 principles of Economic Stability, the Agreement on Economic Coordination Between the Republic of Korea and the Unified Command (1952), the Combined Economic Board Agreement for a Program of Economic Reconstruction and Financial Stabilization (1953), and the Finance Stabilization plan of 1957-1967.
Also included are detailed plans regarding monetary policy, essential component for financial stability, such as the composition and determinants of money supply, the forecasting of optimal money supply, the change and trends of money supply routes, and the range and limits to the rule of money supply.
There are also measures for increasing competitiveness in the financial market. Descriptions of the tools that can be employed for financial policies, evaluations of their effects, policy measures for the private sector, and direct control methods for financial institutions were enumerated. Also, it includes methodology for direct control of the loan program, and details regarding the loan ceiling system, re-discount policy, open-market operations, and the reserve requirements ratio policy.
In an open-market policy, the central bank controls financial markets through intervention in the open market, selling securities at market price. For the reserve requirements ratio policy, it is legally required that commercial banks loan no more than a specific ratio of total deposits, to ensure fulfillment of a depositor’s withdrawal request.
These polices have been adapted across the last 50 years as major tool of financial policy.
The 46 charts and statistical data which were included to help in understanding each chapter briefly show Korean financial plans. They can be used as important historical data on the economic condition of each era.
우리나라의 재정안정계획개관(Overview of Korea’s financial stabilization plan)
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Financial Policy
Economy < Economic Administration
|Holding||재무부; 한국개발연구원 국제정책대학원|