Recent Trends of Illegal Activities in Korean Financial Markets, and Institutional Recommendations

In the wake of rapid economic growth in 1960s the Korean economy has been faced with a risk of economic offense, especially with a high risk of illegal activities for crime returns in financial markets. Moreover inevitable liberalization and internationalization of the Korean economy make the unfavorable risk of financial markets worse so far. In the perspective of economics of crime, with a scheme of matrix of illegal risk and policing cost minimization (effectiveness and efficiency) this study is to analyze the trends of recent illegal activities, and to grope for strategy and institutional countermeasures against financial crime. To put it more concretely, it proposes some suggestions which comprise the improvement of laws and regulations, the securing of specialized organization in the phase of institutional design. In addition, it recommends the establishment of advanced risk management and valued information system, and the building of a cooperative policing system among the interested players on the prudent policy mix and governance in the phase of institutional implementation.