After the Asian financial crisis of 1997, the Korean government geared up to carry out financial restructuring. As a result, the number of domestic financial institutions stood at almost half the number before 1997, but their asset size, soundness, and profi tability were greatly improved. For example, the total assets of banks had increased to 1,400 trillion won by the end of 2006, a remarkable upgrade compared with 600 trillion won in 1997. In spite of the massive fi nancial restructuring, however, the Korean financial industry is still weak in such areas as profit structure, business models, efficiency, and productivity. This is especially true for various financial institutions related to the capital market—that is, financial investment companies (FICs)—that have yet to be fully developed.By contrast, banks have played a significant role increating a market for the private placement of debts and in the derivatives markets.