Financial Regulatory Reforms in Korea Responding to the 2008 Global Financial Crisis: Are They Following the Global Trends?

Since the 2008 global financial crisis ('GFC'), many countries have endeavoured to reform their financial regulatory systems, including banking and financial regulation. The reforms attempted to respond to the crisis in line with the new global regulatory framework initiated by G-20 and international financial organisations. The Korean government has also proposed new legislation and financial reforms in response to the GFC. They include reinforcing protection for financial consumers, strengthening the corporate governance in financial institutions, implementing Basel III, introducing a bank levy scheme, and enhancing a financial information sharing scheme. This article seeks to review the regulatory reform measures, and to analyse whether such measures follow those global trends. Then, given that further reforms remain necessary to rectify other shortcomings revealed as a result of the GFC, this article provides some recommendations for the future direction of reforms to further enhance the competitiveness of the Korean financial industry. They include reshuffling the financial supervisory agencies, establishing an independent financial dispute conciliation agency, establishing a macro-prudential supervision and policy framework, promoting the corporate governance system in financial institutions, creating a central financial information repository, and setting up a new framework for regulating systemically important domestic financial institutions.