Banking systems in South Korea

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Banking 

systems in 

South Korea

To’xtashov Jaloliddin

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General information about banking system 

of South Korea

•

The Korean financial system is one of the largest and most developed in Asia.

Important policy changes have been taking place since the 2013 FSAP and

the system has remained relatively stable reflecting also the supporting role

of the State. The authorities have continued their efforts at upgrading the

prudential, legal, and supervisory framework for the financial sector, and

keeping up with international standards and practices in other G20

jurisdictions.

•

The banking system—and the broader financial system—has been steadily

growing since the last FSAP. On the back of robust economic growth, new

regulations, and state provided facilities such as mortgage insurance, most

parts of the banking system are prudentially strong. The authorities have

been steeling the system with micro and macroprudential measures (MPMs)

against vulnerabilities, strengthening the crisis management framework, and

upgrading the prudential and legal framework.

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Central Bank of Korea

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The Bank of Korea is the central

bank of the Republic of Korea and

issuer of Korean Republic won. It

was established on 12 June 1950

in Seoul, South Korea.

•

The Bank of Korea has the

exclusive right to issue banknotes

and coins in the Republic of Korea.

The banknotes and coins thus

issued have the status of legal

tender within the country for all

transactions, both public and

private, without limitation

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Commercial Banks in South 

Korea

KB Kookmin Bank, Shinhan Bank, Hana Bank, and Woori 

Bank are among the largest commercial banks, not only in terms 

of total assets but also in terms of. In 2016, two digital banks, 

Kakao Bank and K Bank, were established and have since 

received national and international recognition.

As a financist we cannot to miss the currency of state to learn 

about banking system.

In the next slide we will talk about KOREAN WON

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National Currency

The South Korean won, officially 

the Korean Republic won is the official 

currency of

South Korea

. A single won 

is divided into 100 jeon, the monetary 

subunit. The jeon is no longer used for 

everyday transactions, and it appears 

only in foreign exchange rates. The 

currency is issued by the

Bank of 

Korea

, based in the capital city 

of

Seoul

.

The Bank of Korea is the only institution in South Korea

with the right to print banknotes and mint coins. The

banknotes and coins are printed at the KOMSCO, a

government-owned corporation, under the guidance of the

Bank of Korea. After the new banknotes and coins are

printed/minted, they are bundled or rolled and shipped to

the headquarters of the Bank of Korea. Every year,

around

Seollal

and

Chuseok

, two major Korean holidays,

the Bank of Korea distributes large amounts of its currency

to most of the commercial banks in South Korea, which are

then given to their customers upon request. Below

exchange rate.

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The

complexity

of

financial

conglomerates should be reflected in the

application of the recovery and resolution

framework. Also, despite the increasing

strategic importance of the overseas activity

of Korean banks and the significant share of

foreign banks in the Korean system, little

thought has been given to managing the

failure

of

cross-border

firms.

Consequently, the government relied on

direct or selective control of money and

credit to channel funds towards productive

sectors.

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Document Outline

• Banking systems in South Korea
• General information about banking system of South Korea
• Central Bank of Korea
• Commercial Banks in South Korea
• National Currency
•  The complexity of financial conglomerates should be reflected in the application of the recovery and resolution framework. Also, despite the increasing strategic importance of the overseas activity of Korean banks and the significant share of foreign banks in the Korean system, little thought has been given to managing the failure of cross-border firms. Consequently, the government relied on direct or selective control of money and credit to channel funds towards productive sectors.