Republic of Korea: Financial Sector Assessment Program-Technical Note-Macroprudential Policy Frameworks and Tools

September 18, 2020

Preview Citation

Format: Chicago

Republic of Korea: Financial Sector Assessment Program-Technical Note-Macroprudential Policy Frameworks and Tools, (USA: International Monetary Fund, 2020) accessed November 21, 2024

Summary

Past experience with financial crises places systemic risk oversight at the core of Korea’s approach to the financial system. The Korean authorities have amassed over a decade of experience with macroprudential policies. They have put in place rigorous and sophisticated processes for risk monitoring. They publish first-rate analysis. And they have actively developed measures to mitigate risks to the financial system—notably from FX exposures, and from household indebtedness—as circumstances have changed. But their system has evolved to be highly complex, which poses challenges for coordination, communication, and transparency; moreover, their toolkit needs to be extended. These areas should be the focus of efforts to strengthen the policy framework.

Subject: Banking, Countercyclical capital buffers, Financial regulation and supervision, Financial sector policy and analysis, Financial sector stability, Macroprudential policy, Macroprudential policy instruments, Systemic risk

Keywords: Carry trade, Countercyclical capital buffers, CR, Disincentivize bank, Exchange rate, Financial sector stability, Financial system, Fixed interest rate, Foreign currency, Foreign exchange market, FX liability, Global, ISCR, Macroprudential policy, Macroprudential policy instruments, Monetary policy, Stabilization fund, Stress test model, Systemic risk

Publication Details

Pages:

67
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2020/277
Stock No:

1KOREA2020004
ISBN:

9781513557014
ISSN:

1934-7685

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