The objectives of this study are: to analyze the current structure of the Korean capital market; and to make policy suggestions regarding how to foster the Korean capital market, based on an interpretation of recent trends.
The growth of a national economy crucially depends upon the mobilization of capital in the form of investments, and an efficient allocation thereof. The advancement of financial institutions and markets always precedes the growth of the real economy. Stock markets are indispensable as mobilizers of long-term investments and provide industrial funds in the form of direct financing. Stocks also provide effective forms of financial savings that encourage citizens to save for the future and for national economic growth. Since the financial reforms of 1972 that sought to break off the ties—whether perceived or actual—between the capital market and a few exclusive trading houses and speculators, the capital market in Korea has successfully re-established itself as an instrument of public value, providing direct financing, securities trading, and investing for ordinary depositors.
The advancement and growth of the capital market, however, stems not only from institutional and legislative reforms, but also from other changes in the popular economy at large. In particular, we must not overlook the significant impact and benefits that the worldwide economic boom and increases in Korea’s exports exerted on the restructuring of Korean businesses and the institutionalization of the Korean private bonds market in 1972.
This study is mainly divided into three chapters. Chapter 1 provides an outline of the development of the Korean capital market across different eras and periods. Chapter 2 examines the larger economic backgrounds that have prompted the recent growth of the Korean capital market (i.e., the August 3 Emergency Economic Stability Measures, trends in the public interest rate, the status of business capital, and the emergence of parallel money markets such as the short-term capital market). Chapter 3 offers policy recommendations regarding how to foster the capital market further.
The policy suggestions that this study makes pertain to various subjects, including: how to increase the amounts of marketable securities in circulation; how to develop and foster demand for stock investments; how to consolidate the basis for the stock market; and how to encourage initial public offerings.
한국자본시장의 구조와 기능(I)(Structure and functions of the Korean capital market)
서울 : 한국개발연구원
|Series Title; No||정책연구시리즈 / 73-13|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < General|
|Holding||KDI; KDI School|