Title: Financial globalisation and its challenges to economic sustainability in South Korea

Authors: Leonardo E. Stanley

Addresses: CEDES, Sánchez de Bustamante 27 (C1173AAA), CABA, Argentina

Abstract: This paper analyses the recent liberalisation experience in South Korea. This country was historically characterised by financial repression and capital controls, but it has turned to financial liberalisation since the early nineties. The South Korean experience with liberalisation and the subsequent financial crash are described with an account of the institutional changes introduced. At present, there is widespread perception of the need for a more pro-active regulatory stance towards capital inflows. The Korean experience shows policymakers' renewed enthusiasm with policy intervention coupled with the Bank of Korea unceasing quest for financial markets' stability. At the micro level, we observe a dwindling enthusiasm with foreign banks role on the part of monetary authorities.

Keywords: financial globalisation; macroeconomic volatility; capital controls; economic development; global financial crisis; economic sustainability; South Korea; financial liberalisation; institutional changes; financial regulation; capital inflows; policy intervention; market stability; foreign banks.

DOI: 10.1504/LAJMSD.2015.073062

Latin American Journal of Management for Sustainable Development, 2015 Vol.2 No.3/4, pp.264 - 279

Received: 06 May 2014
Accepted: 22 Sep 2014

Published online: 13 Nov 2015 *

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