Korean Capital Market: the way ahead in the New Year

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Hello all. It has already been nearly a week since we greeted the New Year. Hope we all have well managed our days so far. Reminding the beginning of this year, I would like to share the sketch, ‘New Year Opening Ceremony for Securities and Derivatives Marekt.’ The ceremony was held at Korea Exchange (KRX) office on Wednesday January 2, 2013. Since 1st of January is marked as the public holiday, stock market could not open on that day. So, on the following day, people gathered to celebrate the very first day of stock trading in 2013. FSC’s Chairman, Kim Seok-Dong, attended the ceremony and delivered his address regarding ‘Korean Capital Market: the way ahead.’

 

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Before jumping into the issue, Mr. Kim acknowledged that, “Economic situation was tough through and harsh throughout the last year, both at home and abroad. Korean economy relatively well survived, compared to other countries having suffered severe economic downturns.” For the capital market to build stability and to respond to risks in a pre-emptive manner, it is necessary to set a right policy platform. Let us look into the details of the platform addressed.

 

First, capital market should operate in a way which supports the real economy. This is to encourage businesses to be innovative and dynamic in economic flows. For such an operation, financial regulations will check up potential risks in the market and analyze polarization in stock market. ‘thorough analysis’ of market will be carried on to prevent liquidity problem and to design valid and readily effective policy measures.

 

Second, capital market is to take a role as ‘new growth engine’ in our economy. How to let it actualize? FSC will make an effort to amend Capital Markets Act, which will allow investment banks to grow in Korean financial market. Under this circumstance, capital market and financial investment will contribute to building a ‘safety net’ in 100-age society. Tax and pension plans are to be improved and amended, accordingly. Advanced financial market, furthermore, will provide employment opportunities for the young, implying the virtuous cycle in our economy.

 

Third, nothing can be more emphasized than ‘market stability and order’. A close monitoring will be continued to supervise overall weaknesses and price fluctuations in capital markets. If any financial activities deterring market stability and harming investors are found out, there will be appropriate punishments. Ultimately, capital markets will be socially responsible for financial consumers.

 

‘Advancement of financial system’ cannot happen with a blink of eyes, as we know. However, once great efforts are put into, we are to expect our financial system to be the ground for further improvement and growth in our economy. The mind set at the beginning of this year should keep going, whether it is our individual wishes or the broad issue as like ‘the betterment and way forward for capital market.’

 

Regards,
Frank

 

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