Hi guys! How have you been? I am pretty exhausted as this summer has been extremely hot for me. But, it is already fall though.
A few days ago, 4th of September, I’ve been to ‘The Bellwether Series: South Korea, 2012’ at Grand Hyatt Hotel, Seoul. So, today I’m gonna tell you the story about this conference.
This conference was held by The Economist magazine – I’m pretty sure all of you heard about thie magazine at least once in your life – for the purpose of discussing the facing issues about the world economy and finance. This time, many were invited to the confernce, inclduing economists, financial experts especially having renown for Asia-Pacific area, and Korean government authorities. They were the panel of the talk, ‘Asia Finance: Victory by Default?’.
The Financial Services Commission (FSC)’s Chairman Kim Seok-Dong delivered the meaningful keynote speech, ‘Korea’s Financial Policies Ahead’. It was a good opportunity to know the future agenda of Korea’s financial policies. His speech was consistent with his previous notions at other conferences.
As we all know, the global economy has been facing an unheard of recessionary period along with the 2008 global financial crisis and the euro-zone debt crisis. Those crises have slowed down the growth of real economy in developing countries as well as developed countries. In regard to this sluggish trend around the world, Mr. Kim said that we need ‘economic paradigm shift’. Mr. Kim acknowledged that neo-liberalism has helped to increase efficiency in many countires for the past four decades. However, he pointed out in some areas neo-liberalism hasn’t performed well and caused problems such as worsening social polarization, widening income disparity and frequent crisis-prone asset bubbles. The paradigm shift calls for a new post-crisis economic order. The new order should better balance out between the market and the role of governments, seeking economic stability.
He, in addition, highlighted that financial policies should align with the paradigm shift. From this point of view, Korea actually stands out. Having experienced the financial crisis in 1997, Korea learned how to repond to the crisis management, which is internationally praised as an excellent model. For instance, the government implemented a package of extensive measures to handle household debts. (See this URL to know more details https://financialservicescommission.wordpress.com/2012/08/21/koreas-household-debt-and-policy-response/). Of course, other measures were undertaken as well, for the purpose of stabilizing the financial industry, fixing problems of mutual saving banks, and providing initiative help for households and small and med-sized enterprises. Those were all notable achievements.
Thanks to all those efforts, Moody’s recently upgraded Korea’s sovereign rating to Aa3. To maintain this positive reputation, Mr. Kim promised to keep consistency in Korea’s financial policy, regardless of the presidential election in this December and the related political influences ahead. He stressed out the emphasis on consumer and investor protection, wheares policy measures focused more on financial service providers in the past. In the end, Mr.Kim expects that the financial sector performs its core function to contribute to the real economy and unlift the financial industry as Korea’s future growth engine.
After his session, I was able to imagine a positive future of Korean financial industry. Until now, the Korean financial market has played its role of supporting other domestic companies to become a globally compeitive company such as Samsung and Hyundai. Financial market was like a backbone of Korea’s real economy. However, with shifting economic paradigm, it is now time for the Korean financial market to become global and competitive in itself. Let’s pay attention to the future growth of Korea’s financial industry.