Research Staff

Research Staff


Ph.D. Economics, University of Michigan, Ann Arbor, August 2007
M.A. Economics, University of Michigan, Ann Arbor, April 2001
M.B.A. Business Administration, Yonsei University, Seoul, August 1999
B.B.A. Business Administration, Yonsei University, Seoul, February 1997
Professional Experience
August 2012 ~ present, Research Fellow, Korea Capital Market Institute
Sept. 2011 ~ July 2012, Assitant Professor, Sangmyung University
August 2007 ~ August 2011, Research Fellow, Korea Capital Market Institute



Introduction of Korea Savings Bonds: The Implications and Impacts on the Market / Apr. 02, 2024
South Korea will begin to issue Korea Savings Bonds (KSBs) as the amendment on the State Bond Act in 2023 formed the legal grounds for the introduction of those bonds. KSBs aim at broadening the demand base of government bonds and also providing the public a means of stable investment. The significance of KSBs lies in that they could secure a less-volatile investor base for stable fiscal financing and offer the public a useful means of investment for retirement income. KSBs are a type of government bonds that can be purchased only by individual investors. Unlike other government bonds that are traded in the secondary market, those bonds cannot be transferred to other parties or used as a security interest such as pledge. KSBs come in two maturities: 10-year or 20-year. Those bonds do not pay any interest until maturity. Their principal and interest are paid in lump sum on the maturity date. They are scheduled to be issued 11 times a year. The issuance is carried out via subscription by a sales agency.If held to maturity, KSBs provide substantial benefits. The benefits can be divided into bonus spreads and tax benefits. KSBs held to maturity are subject to compound interest with bonus spreads on top of the coupon rate set at issuance. Also, if those bonds are held to maturity and the purchase price is no larger than KRW 200 million, the interest income is taxed separately from income at a flat rate of 14%. However, it is worth noting that both bonus spreads and tax benefits are applicable only to held-to-maturity bonds, and they are not allowed if investors redeem their bonds before maturity.The introduction of the new bond is expected to have a significant impact on the government's fiscal financing behavior as well as investors' asset accumulation pattern. The impact of those bonds' interest calculation via bonus spreads and compounding is especially more pronounced in long-term investment. Hence, the decision to invest in those bonds should be made from the perspective of long-term investment. KSBs are issued by the government, and thus are quite safe with principal protection. Investors are advised to make an informed investment decision after fully understanding that early redemption deprives them of all the benefits such as bonus spreads, compound interest, and separate taxation. It is wise to manage the regime for KSBs in a consistent manner that minimizes trials and errors at its nascent stage, ensuring that it helps retail investors to secure their retirement income from the long-term perspective.
Characteristics of Korea’s Taxation System on Pensions and Policy Directions for Promoting Pension Asset Accumulation / Oct. 10, 2023
In Korea’s tax treatment of pension schemes, the most basic principle is the “Exempt-Exempt-Taxed” (EET) regime under which contributions and investment returns on pension assets are exempted from tax and pension benefits are taxed upon withdrawal. Korea’s most representative public pension plan, National Pension Service (NPS), is subject to the EET regime that is similarly applied to retirement pensions. As for the IRP and Pension Savings, contributions are eligible for tax deduction and investment returns are exempted from tax. If a beneficiary chooses a lump-sum payment, retirement income tax is imposed while if an annuity is selected, pension benefits are subject to pension income tax. Pension tax systems adopted by other countries offer a wider range of tax incentives to private pension plans than to public pensions. The salient features of such systems include a significantly high tax exemption limit on pension contribution, a wide range of options for tax planning, and subsidy and/or tax credit for pension contribution by low income earners. Compared with other countries’ taxation approach on pension, the overall framework of the taxation system on pensions for the NPS and retirement plans needs to be maintained, while the tax treatment of IRPs and personal plans should be geared toward providing larger incentives for pension contribution. It is also necessary to raise the exemption limit on pension contribution and adjust upward the limit on a periodic basis by indexing on inflation rate or other macro-economic indicators. Both contribution with tax deferral and one with after-tax income need to be available. In addition, we need to allow tax credits and/or matching contributions by the government for the pension contribution to ensure retirement income for the low income earners.
Silicon Valley Bank's Collapse: Its Ripple Effects on Korea's Financial Market and Relevant Implications / Apr. 04, 2023
A series of US bank failures including the collapse of SVB have resulted in increased volatility in the global financial market, reinforcing investors’ tendency for risk aversion. SVB’s fall represents not only characteristics typical of financial institutions’ bankruptcy process but also specific features arising from recent changes in the financial environment. The noticeable maturity mismatch between asset holdings and deposit liabilities, the concentration of investment assets and the US Fed’s failure to oversee banks can be primarily attributable to the bankruptcy of SVB. Furthermore, it is noteworthy that the common use of banking services via mobile phone and social media has helped immensely speed up the failure of SVB, albeit not a direct contributing factor.The collapse of SVB is unlikely to escalate into systemic risk across the entire financial market, which is in contrast to how the downfall of Lehman Brothers accelerated the global financial crisis in September 2008. The US government and Fed fell short of avoiding the collapse of banks but have taken prompt action to prevent bank failures from spreading to the banking system. The full deposit insurance and special liquidity provision program for banks are expected to significantly help curb additional bank runs by alleviating the fears of depositors and investors. Also, it is worth considering that the latest bank failures can be characterized by a liquidity crisis that arose from losses on valuation of assets amid interest rate hikes, not by an accumulated credit risk posed by distressed assets. Although market indices including stock prices, market interest rates and exchange rates are inevitably subject to price falls and higher volatility, such conditions are unlikely to send the entire market into a panic.The demise of SVB is another prime example of how important risk management of financial services firms and the relevant regulatory framework are to their sustainability. Further measures should be taken to strengthen banks’ risk covering capacity, considering the risk of household and corporate debt deterioration, concerns about the default of real estate PF fueled by the slump in the property market and the possibility of additional shocks from abroad. Although the pace and degree of rate hikes may be adjusted by a string of bank failures and insolvency risks, it is undesirable to jump to a conclusion that the Fed will cut base rates within this year. It is highly likely that the collapse of non-banking financial firms is occurring at an unprecedented pace going forward. Hence, there is a growing need for manualizing policy responses in advance and swiftly creating and executing an appropriate policy mix, depending on the intensity of shocks.
Financial Market Stabilization Facilities of Korea and the US: Differences and Policy Implications / Nov. 08, 2022
Amid ongoing rate hikes, the financial markets at home and abroad are suffering great fluctuations. The liquidity of financial firms has been aggravated drastically, and credit spreads have increased to an unusual level. While the corporate bond market faces severe strains, the foreign exchange rate continues a sharp upward trend. These worrying developments necessitate the implementation of financial market stabilization facilities once again. In the process of overcoming the 2008 global financial crisis and the 2020 Covid-19 pandemic, the financial markets of Korea and the US have accumulated experience in how to operate financial market stabilization facilities. A comparative analysis of the facilities adopted by the two countries reveals the following differences. ① Korea is highly dependent on private financial companies to secure funding for stabilization facilities, while the US uses the Fed’s monetary power. ② The US fiscal authorities (the Department of the Treasury) take over credit risk arising from the operation of financial market stabilization facilities, whereas credit risk could be shared by private financial companies contributing to such facilities in Korea.③ The Fed’s policy tools are segmented by markets and the intervention in the CP market is implemented for the first step. Compared with the US, Korea rarely operates different stabilization programs for each segmented market and has yet to fully recognize the urgency of the short-term money market.④ The US reflects the costs of liquidity support in pricing by adding pricing fees, while Korea hardly requires such fees as its policy puts more weight on support for companies.⑤ US financial market stabilization facilities hardly intervene in the stock market but such intervention can be observed in Korea.The need for financial market stabilization facilities is growing once again. If the possibility that financial firms or private companies go bankrupt increases sharply amid strong signs of a market crisis, financial market stabilization measures should be executed immediately on a massive scale. As such facilities serve as a safeguard against a financial emergency, their execution method and process should be thoroughly examined and manualized before any crisis occurs. The readiness with well-functioning emergency manual could make a huge difference between life and death for companies in the financial crisis period.

Seminar Presentation

Research performance


ㅇ “Increasing Foreign Investment Shares in Korean Bond Markets: Is This Good or Bad? ,” Capital Market Forum, Vol. 5, 2008
ㅇ “Transitioning to the Electronic Securities and Its Effects to Korean Financial Market,” (with P. Kim, S. Lee, Y. Kim, and I. Cho), Research Paper, 09-01, Korea Capital Market Institute, 2009 
ㅇ “Development of the Mortgage Pricing Models in the US Financial Institutes and Its Implications,” Housing Finance Monthly, Vol. 56, 2009 
ㅇ “Implementing Exit Strategies and Its Impact on the Financial Markets in Korea,” Capital Market Perspective, Vol. 2, No. 2, 2010 
ㅇ “Cohort Effects in Promotions and Wages: Evidence from Sweden and the United States,” (with I. Kown and E.M. Milgrom), Journal of Human Resources, Vol. 45, No. 3, 2010 
ㅇ “Launching the Qualified Institutional Buyers and Its Effect on the Korean Capital Markets,” Securities Finance, Vol. 361, 2010 
ㅇ “Introduction of the Korean Treasury Bills and Its Impacts,” Capital Market Perspective, Vol. 3, No. 3, 2011 
ㅇ “Business Cycle Implication of Long-Run Risk Consumption CAPM: Korean Stock Market Evidence,” (with K. Binh and S. Son), Korean Journal of Futures and Options, Vol. 20, No. 3, 2012 
ㅇ “Adoption of Financial Transaction Taxes in Europe and Its Implication to Korean Financial Market,” (with J. Kim), Issue and Policy Paper, 13-01, 2013 
ㅇ “Evaluation on Koreas Money Market Benchmark Interest Rates and the Related Policies,” (with J. Kim and S. Son), Korean Journal of Financial Management, Vol. 30, No. 3, 2013 
ㅇ “Introduction of the New Securities Settlement System and Its Effect for Korean Capital Market,” Capital Market Perspective, Vol. 5, No. 2, 2013 
ㅇ “Volatility in the Korean Bond Market: Evaluation and Implications,” (with I. Baek), Issue and Policy Paper, 13-06, 2013 
ㅇ “Does Government Bonds Issuance Affect Interest Rate and Private Sector Capital Investment in Korea?” (with K. Binh and E. Seo, Journal of Korean Economic Studies, Vol. 31, No. 3, 2013 
ㅇ “The Policy Characteristics of Foreign Government Bond Markets and Their Implications on KTB Market,” (with I. Baek and P. Kim), Investigation Paper, 14-01, 2014 

[Conference Presentations] 

ㅇ “The Corporate Bond Market in Korea,” South Asian Domestic Debt Markets Study Workshop, World Bank and KSRI, December 2007. 
ㅇ “Development of Korean Bond Markets and Lessons for Asia: Government Bond,” Asian Bond Market Outlook, Asian Development Bank and KSRI, November 2008. 
ㅇ “CP Market Reforms,” KSA Seminar Series, Korea Securities Association, April 2009. 
ㅇ “Replacing CP with the Short-term Corporate Bond,” KCMI Policy Seminar, Korea Capital Market Institute Financial Services Commission, October 2009. 
ㅇ “Exit Strategies and Their Impacts on the Financial Markets in Korea,” KFA Symposium, Korean Finance Association, May 2010. 
ㅇ “The Bond Markets in Korea,” Asian Bond Market Forum, Asian Development Bank KCMI, November 2010. 
ㅇ “Launching Qualified Institutional Buyer Securities in Korea and Its Impacts on SME Financing,” KCMI Policy Seminar, Korea Capital Market Institute Financial Services Commission, November 2010. 
ㅇ “Corporate Bond Markets in Korea,” Asian Bond Monitor Forum, Asian Development Bank, 2012. 
ㅇ “Current Issues of Korean Capital Market and the Implications on Indonesian Capital Market,” Indonesia-Korea Capital Market Forum, KDB Daewoo Securities, 2013. 

[Ph.D. Dissertation] 

Tax Burden and Compensation Practices in the Financial Service Industry