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Seoul Journal of Economics - Vol. 22 , No. 1
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Seoul Journal of Economics - Vol. 22, No. 1, pp. 77-94
Abbreviation: SJE
ISSN: 1225-0279 (Print)
Print publication date 28 Feb 2009
Received 24 Nov 2008 Revised 13 Feb 2009

Global Financial Crisis: Background, Prospects, and Its Impacts on Korea
Jae-Ha Park ; Sangche Lee
Vice President, Korea Institute of Finance, 7th Fl., KFB Bldg., 4-1, 1-ga, Myong-dong, Chung-gu, Seoul 100-021, Korea, Tel: +82-2-3705-6317 (jhpark@kif.re.kr)
Research Fellow, Korea Institute of Finance, 6th Fl., KFB Bldg., 4-1, 1-ga, Myong-dong, Chung-gu, Seoul 100-021, Korea, Tel: +82-2-3705-6315 (sclee@kif.re.kr)

JEL Classification: G01, G18

Abstract

The global financial system is going through turmoil triggered by the subprime mortgage crisis in the United States. Severe adjustments befell all sorts of financial markets, and financial institutions are very vulnerable to potential shocks from deteriorating economic conditions. This paper briefly recaps the ongoing global financial crisis and its impact it has had on Korean financial markets and economy. It also comments on some issues of crisis management strategies in the short-run, including bailouts and coutercyclical macroeconomic policies. Lastly, from a long-term perspective, it proposes an appropriate policy direction for preventing and managing future crises.

Keywords: Financial crisis, Crisis management, Financial regulation
Acknowledgments

Paper presented at the 16th SJE-KERI-KIF International Symposium on “Productivity, Growth and Trade in East Asia” organized by Seoul Journal of Economics, Institute of Economic Research, Seoul National University.

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