Financial Regulatory Reform in South Korea Then and Now

Inlemational besl practiæs for fînancial regulation emphasize the significance ore alory independence for prudential regulation and effective c∞rdination for resolution of problems in fina ncial system. These two, though not mutuaUy exc1usive, have been odds with eam other in the Korean context where coordination takes plaæ not among 여ua ls but with IOp executives having the clear upper hand. This paper takes a c10ser look at South Korea’s finandal regulatory reforms since the 1997 crisis and a’ gues that 50uth Korea’s financial regulation had oscil lated between these two goals and the balance between gllla tcr，Idepetldem:e and effi:ctîve roordÎlIllfioll had been tipd in the favor of the latter le analysis shows that dcspitc the initial pledge 10 regu lalory independence and departure from the past practices, regulalory independence has been frequenlly com promised, leading 10 a reversal to old p ractiαs: strong political and bureaucratic influence on finandal regulation