This study aims to investigate the current status of our country’s financial sector and to present the improvement plans that will follow the new five-year economic plan.
Lately, with the increasing size of our economy, the complexity of our industrial structure and the rapid changes caused by the liberalization, the opening and the internationalization required to boost our country’s economic development, the implementation and reformation of finance-based policies are inevitable. So far, our financial sector has made great contributions to our economy’s growth and development by supporting limited resources with low price to the politically required sectors. However, during this process, the publicness of these financial institutions has been prioritized over their business characteristics and their profitability, which has hurt their competitiveness and their efficiency.
The recent domestic and foreign changes make financial reformation a must. Above all, the liberalization of the finance sector itself should be achieved because the smooth operation of these institutions has been hindered by various regulations and they have consequently lost interest in the rationalization of their management. To enhance this, it is necessary to achieve the liberalization of interest rates, autonomy within financial institutions, the liberalization of financial institutions’ asset management and the disposal of bad debts. Additionally, the direct management method of currencies has not been settled down because the current conditions have not allowed the use of traditional currency management tools such as a re-discounting policy, a cash-reserve ratio policy and an open-market operation. In order to operate a finance sector with market-sourced principles, it is necessary to improve the efficiency of the currency credit policies and to strengthen financial supervision.
Although it is necessary to improve the international competitiveness of financial institutions through enlargement and specialization, the advancement of the financial business should be achieved through restructuring because the conditions for induction have not been created yet and financial institutions have not made a big enough effort. To this end, new financial institutions need to be established and existing ones need to be enlarged and specialized. Additionally, measures such as adjusting business areas, reforming special banks and reforming the ownership structure of financial institutions need to be implemented. Lastly, in order to actively deal with domestic and foreign environmental changes when the market function of currencies is not enough and usage of the Korean Won is limited, it is necessary to ease the limitations placed on currency exchange, activate the foreign currency market and implement the complementary tool for liberalization.
금융개혁부문(안)(The financial reformation part (proposals))
|Series Title; No||신경제 5개년계획|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Financial Policy|
|Holding||재무부; 한국개발연구원 국제정책대학원|