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The operation of macroprudential policy measures : The case of Korea in the 2000s

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Frame of Image 1.3 May 97.3
Dec. Dec. Aug. Dec. Dec. Dec. 2005 2007 2008 2008 2009 2010 Deposits CDs Debentures Funds Money in Trust Others Capital Total 63.6 2.6 9.9 14.2 2.2 1.4 6.1 100 55.3 4.2 11.4 16.6 3.9 2.8 5.9 100 54.1 4.8 11.3 17.3 4.0 2.6 5.9 100 57.0 4.5 10.7 15.2 3.6 2.2 6.8 100 59.6 4.5 8.9 13.8 3.8 2.6 6.8 100 64.0 1.7 8.4 11.9 3.5 4.1 6.6 100
Date Oct. 9 Oct. 13 Oct. 19 Oct. 27 Oct. 27 Oct. 27 Oct. 30 Oct. 31 Nov. 7 Nov. 24 Dec. 3 Dec. 11 Dec. 11 Dec. 12 Dec. 16 Dec. 18 BOK cut of policy rate
Actions and Measures Government and BOK release of a plan for providing FX liquidity for international trade by SMEs Government provision of guarantees of banks’ foreign currency-denominated debts BOK cut of policy rate BOK inclusion of bank debentures and public entity bonds as OMO collateral BOK introduction of auction scheme to provide FX liquidity to banks BOK signing of currency swap agreement with FRB FSC change of DC liquidity ratio rule BOK cut of policy rate BOK provision of liquidity to banks participating in Bond Market Stabilization Fund BOK payment of interest on banks’ reserves at BOK BOK cut of policy rate BOK inclusion of securities companies among counter- parties for BOK RP transactions BOK signing of currency swap agreement with PBOC1) BOK expansion of currency swap agreement with BOJ1) Launch of Bond Market Stabilization Fund FSC release of plan for establishment of Bank Recapitalization Fund
Note 5.25% → 5% $16 Bil up to $100 Bil 5% → 4.25%
$30 Bil 3-month → 1-month


Full Text
Title The operation of macroprudential policy measures
Similar Titles
Sub Title

The case of Korea in the 2000s

Material Type Reports
Author(English)

Lee, Jong Kyu

Publisher

[Seoul]:The Bank of Korea

Date 2013-02
Series Title; No BOK Working Paper
Pages 56
Subject Country South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Economy < Financial Policy
Holding The Bank of Korea; KDI School

Abstract

This paper draws implications for the effective operation of an MaPP framework based on the experiences during the 2000s of Korea. Korea had in fact operated several MaPP measures, but could not shield itself from the impacts of the global financial crisis in 2008 because of a new type of financial imbalance accumulated in the 2000s. The implications are summarized with respect to the objectives, scopes, and other elements of the MaPP policy framework: that the objectives of MaPP measures should be set in the macroprudential dimension rather than from a microprudential perspective; that the MaPP measures should be devised in ways that reduce the possibility of regulatory arbitrage or minimizes the boundary problems; that MaPP measures in the forms of ratio regulations may need to be supplemented, with for example caps on borrowings or debts; (The rest omitted)