Korea's Economy
From the Issue
Korea's Economy Volume 31About Korea's Economy
Korea’s Economy is KEI’s annual journal publication dedicated to the key issues of the day for the Korean economy. Articles in Korea’s Economy are designed to give the casual, but informed reader insight into issues related to Korea’s markets and financial institutions, economic reform, economic relations with the wider world, and North Korea. It is published jointly each year with the Korea Institute for International Economic Policy.
This report conducts an analysis of the corporate bond market in Korea and the changes in interest rates and term structure since the 1997 Asian financial crisis. The potential risks and solutions for stabilizing the corporate debt market are discussed. Corporate bonds not only play an important role in financing long-term corporate investments but also have a positive and persistent influence on enhancing the capital markets. Thus, the authorities in Korea have attempted to increase the proportion of corporate bonds, which is a means of direct financing, rather than bank loans. Implementing specific plans to stabilize the corporate debt market that are mentioned in this report are critical to sustaining the Korean capital markets as a means towards continued economic growth and prosperity.