What is it about?
This chapter examines the development of Korea’s financial system, with a particular focus on the remarkable growth of its capital markets. Korea’s capital markets expanded more than 40-fold between 1990 and 2021, driven by substantial growth in both bond and stock markets. The chapter describes the structure and development of these markets and examines the roles of financial institutions, derivatives, fintech, and foreign investors. It provides a broad overview of how Korea’s capital markets have evolved alongside the country’s economic and financial development.
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Why is it important?
Korea has experienced one of the most significant financial transformations among major economies, with capital markets becoming an increasingly important source of financing. Understanding this development provides insights into how financial markets can evolve as an economy grows and becomes more integrated with global markets. The chapter brings together information on Korea’s financial institutions, bond and stock markets, derivatives, fintech, and foreign investment to provide a comprehensive picture of this transformation. It also highlights the growing importance of capital markets in capital formation and the broader development of Korea’s financial system.
Perspectives
The motivation for this chapter came from recognizing the need for a comprehensive overview of how Korea’s capital markets have developed alongside the country’s remarkable economic growth. Korea’s financial system has undergone substantial changes, including the rapid expansion of bond and stock markets, greater participation by foreign investors, and the emergence of new financial technologies. We wanted to bring these developments together in a single framework that explains both the structure and evolution of Korea’s capital markets. I hope this chapter helps readers better understand the important role that capital markets have played in Korea’s financial and economic development and provides useful insights for those interested in the evolution of financial markets in other economies.
Dr. Hongbok Lee
Western Illinois University
Read the Original
This page is a summary of: Capital Markets and Capital Formation in Korea, February 2025, Taylor & Francis,
DOI: 10.4324/9781003180920-4.
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