Korea Capital Market Institute

The Competitive Structure of the Active ETF Market: The U.S. Experience and Implications [Senior Research Fellow] Kim, Jaechil / May. 06, 2026 Active ETFs are growing rapidly in the United States, and many small and midsize asset managers that had struggled amid the decline of mutual funds are now gaining a foothold in the active ETF market. The regulatory easing introduced in the U.S. ETF market from late 2019 appears to have lowered entry barriers and encouraged these managers to enter the active ETF space. At the s... Earnings Guidance in Korea: Institutional Constraints, Market Incentives, and Policy Directions [Research Fellow] Yee, Ha Yoon / May. 06, 2026 Corporate managers voluntarily provide investors with forward-looking information regarding their firm’s future performance through earnings guidance. Earnings guidance enhances the efficiency of capital market by alleviating information asymmetry, improving price discovery, and reducing the cost of capital. In Korea, the introduction of the fair disclosure regime in 2002 estab... Assessing Risk Factors in the U.S. Private Credit Market and the Potential for Risk Transmission [Research Fellow] Jung, Whayoung / Apr. 21, 2026 The private credit market has expanded rapidly, particularly in the U.S., and has become one of the major sources of corporate financing. However, recent defaults among some borrowing firms have heightened concerns about credit risk. At the same time, the rapid advancement of AI has fueled growing perceptions that the business models and revenue structures of the existing softw... The Framework Act on AI Development and Trust and Its Implications for the Financial Investment Industry [Research Fellow] Noh, Sungho / Apr. 21, 2026 The Framework Act on the Development of Artificial Intelligence and Establishment of Trust (“AI Framework Act”, hereafter) and its accompanying Enforcement Decree took full effect on January 22, 2026. the Act provides a comprehensive AI regulatory framework and imposes responsibilities—including transparency, safety, and assessment of high-impact AI—on “AI business operators”—t... Improving Retirement Pension Returns: The Role of Target Date Funds [Research Fellow] Hong, Wonku / Apr. 07, 2026 The low returns of retirement pensions are often attributed to the high reliance on principal-and－interest-guaranteed products. However, simply increasing the share of performance-based products is unlikely to resolve the issue. The fundamental problem lies not only in the allocation of risk assets, but also in the structure of investment decision-making itself. Under the curre... Introduction of the Security Token Framework and Future Market Changes [Senior Research Fellow] Hwang, Seiwoon / Apr. 07, 2026 In February 2026, Korea’s capital market reached a technological turning point with the promulgation of amendments to the *Electronic Securities Act* and the *Financial Investment Services and Capital Markets Act*, marking the formal incorporation of security tokens into the institutional framework. The most fundamental significance of this reform lies in the innovative expansi... Policy Challenges for Stabilizing Exchange Rates and Foreign Exchange Supply and Demand [Senior Research Fellow] LEE, Seungho / Mar. 24, 2026 The won-dollar exchange rate has recently remained at a high level, adding to the burden on macroeconomic management through inflationary pressures and other factors. One of the main causes behind the rise in the exchange rate has been identified as the reduction in net foreign exchange supply resulting from the expansion of Korea’s overseas securities investment. However, this... Cross-Border Crypto Flows and Its Implications [Senior Research Fellow] Kim, Hansoo / Mar. 10, 2026 Cross-border transactions conducted through crypto assets have expanded rapidly in recent years. Enabled by blockchain networks that operate beyond direct national borders, these transactions have grown due to their efficiency and accessibility relative to traditional cross-border payment infrastructures, with stablecoins emerging as the primary driver of recent growth. As of t... The Necessity of Improving the Treasury Stock System and Key Issues in the Proposed Amendment to the Commercial Act [Research Fellow] Hwang, Hyunyoung / Mar. 10, 2026 The acquisition and retirement of treasury shares are among the most representative means by which companies return corporate performance to shareholders. However, while listed companies in Korea have been active in holding and utilizing treasury shares, they have been passive in retiring them, even though retirement directly enhances shareholder value. As of the end of 2025, a... The Investment Value of Analysts’ Recommendations and Target Prices [Senior Research Fellow] Kim, Joon-Seok / Feb. 03, 2026 This article examines whether excess returns can be generated using analysts’ recommendations and target prices issued by domestic brokerage analysts. Portfolios were constructed based on recommendations and target prices announced between 2000 and 2024, and their performance was analyzed. The results show statistically significant excess returns for portfolios ranked highly by... Implications of Policies to Revitalize the Venture Investment Market through Private Capital Inflows [Senior Research Fellow] Nam, Chaewoo / Feb. 03, 2026 The government aims to realize its goal of "becoming one of the world’s four leading venture powerhouses" by transitioning the public-led market structure to a private-sector-centered one through expanded participation of statutory funds and retirement pensions, as well as the establishment of a 150 trillion won National Growth Fund. By providing private investors with incentiv... Digital Financial Literacy in Korea [Research Fellow] Jung, Soomin / Jan. 20, 2026 Digital financial services have become the primary channel for financial transactions, rendering the enhancement of digital financial literacy an essential task rather than a matter of choice. However, evidence from a 2025 survey shows that the average digital financial literacy score of Korean adults is 59.3—substantially below the OECD target benchmark of 70—with only 28.2% o... The Rise of Intangibles and the Decline in Allocative Efficiency [Research Fellow] Jung, Heechul / Jan. 20, 2026 This article examines the slowdown in total factor productivity growth and the decline in potential growth in the Korean economy through the lens of resource allocation efficiency. Despite the growing importance of intangibles for corporate competitiveness, intangible-intensive firms are likely to face structural financing constraints stemming from limited collateral and inform... Korea’s Achievement of KOSPI 4,000 and Its Implications [Senior Research Fellow] Kang, Sohyun / Jan. 06, 2026 In the second half of 2025, the Korean stock market surged at an exceptionally rapid pace, with the KOSPI breaking through the 4,000 mark. This development is being viewed as both a symbolic and substantive milestone, suggesting that the domestic market—long burdened by the so-called “Korea discount”—has entered a phase of structural transformation. However, it is also evident ... Assessing the Drivers of Recent Won Depreciation and Its Macroeconomic Implications [Senior Research Fellow] Kang, Hyunju / Jan. 06, 2026 The recent rise in the KRW/USD exchange rate is assessed to reflect a combination of structural factors—such as increased overseas securities investment driven by ageing and slower growth—and cyclical factors, including co-movement with the Japanese yen and the AI investment boom. Nevertheless, external soundness appears broadly solid, given the expansion of net foreign assets,... Corporate Governance Report Disclosure in Korea and Policy Implications [Research Fellow] Lim, Nayeon / Dec. 23, 2025 Korea introduced corporate governance report disclosure in 2017 in the form of voluntary disclosure. Since then, beginning in 2019, mandatory disclosure has been phased in for KOSPI-listed companies according to their asset size, and starting in 2026, the requirement will expand to all companies listed on the KOSPI market. Currently, companies disclose whether they comply with ... Deposit Tokens as Payment Infrastructure: Necessity and Functional Applications [Research Fellow] Jang, Bosung / Dec. 23, 2025 Recently, major central banks have been focusing on frameworks based on wholesale central bank digital currency (wCBDC) and deposit tokens in developing their digital currency infrastructures. A key feature of deposit tokens is their one-to-one exchangeability with base money, which ensures the singleness of money and provides a unified standard for valuation. Given that a comm... Introduction of Overseas Long-Term Asset Funds and Their Implications [Research Fellow] Kim, Jinyoung / Dec. 09, 2025 Long-term asset funds are designed to invest in private and illiquid assets while providing a certain level of redemption functionality. Major countries such as the United Kingdom, France, Italy, and Canada have introduced or are institutionalizing long-term asset funds to facilitate the flow of private capital into productive assets. Through these funds, they are opening acces... Are Stablecoins Truly Stable? [Senior Research Fellow] Shin, Bosung / Dec. 09, 2025 Stablecoins are a form of private money, and historically, it has been rare for private money to maintain a stable value. As a result, disruptions in payment systems have occurred frequently. In response, major jurisdictions require stablecoins to be backed exclusively by safe reserve assets. Nevertheless, in times of severe crisis, the provision of public safety net may become... Considerations on Virtual Asset Income Taxation under the 2025 Income Tax Act Amendment [Senior Research Fellow] Kim, Kab Lae / Nov. 25, 2025 Under the current Income Tax Act, the taxation of virtual asset income will take effect on January 1, 2027. However, detailed provisions and guidelines regarding various forms of income related to virtual assets, such as profits arising from the lending of virtual assets, airdrops, hard forks, mining, and staking, are still insufficient. Nevertheless, the Income Tax Act amendme... Japan’s Recent Efforts to Revitalize Disclosure and Their Implications [Senior Research Fellow] Lee, Seokhoon / Nov. 25, 2025 The value-up disclosure introduced last year has produced outcomes in expanding shareholder returns mainly among large corporations, but communication with investors through mid- to long-term management plans remains insufficient. Japan has long advanced its disclosure of mid-term management plans, which are now widely established. In particular, the Japanese government support... Introduction of Listed Share Classes for Public Offering Funds: Prospects and Challenges [Senior Research Fellow] Kim, Jaechil / Nov. 11, 2025 Listed share classes of public offering funds will begin trading on October 27, 2025, starting with two funds. The introduction of listed share classes for public offering funds is regarded as a viable alternative that can broaden investment choices for investors who prefer active management in the indirect investment market while preventing the decline of active management. Fo... Industrial Policy for AI Competitiveness [Research Fellow] Noh, Sungho / Nov. 11, 2025 Amid growing expectations for productivity innovation through Generative AI, major advanced countries are pursuing industrial policies to strengthen AI competitiveness at the national strategy level. In this article, I compare AI industrial policies of the United States, China, and Europe to analyze each country's policy objectives and the role of capital markets in achieving t... Trends and Challenges in Extending Stock Market Trading Hours [Senior Research Fellow] Lee, Sungbok / Oct. 28, 2025 The United States is now leading efforts to extend stock market trading hours following its recent shortening of the settlement cycle. In response, major economies such as the United Kingdom, Germany, and Hong Kong are also considering similar extensions. Longer trading hours can enhance market accessibility for both domestic and foreign investors, thereby improving market liqu... Expanding Household Participation in Capital Markets: Rationale and Challenges [Research Fellow] Jung, Whayoung / Oct. 28, 2025 The wealth-accumulation pattern of Korean households—heavily concentrated in real estate—limits the flow of surplus funds into high-productivity industries, thereby constraining the economy’s growth potential and dynamism. Research indicates that revitalizing corporate financing through capital markets promotes private-sector growth, particularly among innovative firms, and sup... Tax Base for Education Tax of Financial Companies and the Need for Profit and Loss Netting [Senior Research Fellow] JANG, GEUNHYUK / Oct. 14, 2025 Issues have been raised regarding the tax base calculation method for the financial company education tax, which reflects only gross gains regardless of overall profit and loss. For securities, foreign exchange, and derivatives, differences in calculated gains amounts occur even when the economic substance is the same, depending on various transaction methods. This has been par... Investment Performance and Asset Management of Domestic Defined Contribution Plans [Research Fellow] Hong, Wonku / Oct. 14, 2025 The domestic retirement pension system, introduced to replace the severance pay scheme, comprises two types: the Defined Benefit (DB) plan and the Defined Contribution (DC) plan. Accordingly, the amount of retirement benefits under both types is expected to be broadly comparable to severance pay. If the rate of return on DC plans matches the rate of wage growth, the benefits fr... Policy Directions to Address the Undervaluation of Asset-Rich Firms: Toward a Korea Premium [Research Fellow] Lee, Sang Ho / Sep. 30, 2025 A significant share of listed firms in Korea trade below their liquidation value, even when conservatively estimated. As of June 2025, about 12 percent of all listed firms fall into this category, commonly referred to as “asset-rich firms.” On average, their liquidation value is 62 percent higher than market capitalization, implying a higher payoff from liquidation than from re... Tasks for Activating KOFR OIS Market [Senior Research Fellow] JANG, GEUNHYUK / Sep. 30, 2025 The Financial Services Commission and the Bank of Korea announced the principles for transitioning the domestic benchmark interest rate system to one centered on the risk-free reference rate, KOFR, and plan to gradually expand the use of KOFR in place of the CD rate, which has been widely used as a reference rate in financial transactions. In the interest rate swap market, wher... Impact of Won-Denominated Stablecoins on the Foreign Exchange Stability and Directions for Global Scalability [Senior Research Fellow] LEE, Seungho / Sep. 16, 2025 Amid active discussions on the introduction of a Korean won-based stablecoin, expectations for financial innovation are rising, while concerns are also emerging over potential risks to foreign exchange stability. However, since it is difficult to identify clear channels for capital outflows, and unless exceptional situations such as a coin run occur, the negative impact on fore... Introduction of Stablecoins in Korea and User Protection [Senior Research Fellow] Hwang, Seiwoon / Sep. 16, 2025 While various debates regarding the pros and cons of introducing stablecoins are ongoing, efforts to introduce regulatory frameworks domestically are becoming visible, taking into account the situations in the EU, United States, and Japan. In establishing domestic stablecoin regulations, it is essential to thoroughly prepare user protection provisions to ensure that market conf... Increasing Demand for Overseas-Listed ETFs in Korea: Causes and Policy Challenges [Research Fellow] Kim, Minki / Sep. 02, 2025 Amid the growing trend of overseas investment by Korean investors, demand for overseas-listed ETFs has also been steadily rising. Analysis of related data suggests that this is not merely a temporary trend, but rather a structural phenomenon driven by the interplay of domestic–foreign tax and regulatory disparities and individual investors’ risk appetite. While domestically lis... MSCI Market Accessibility Evaluation Analysis and its Implications [Senior Research Fellow] Kim, Hansoo / Sep. 02, 2025 MSCI continues to classify Korea as an emerging market, with its 2025 review showing little change from the previous year. Korea is the only country in the region to receive a “needs improvement” rating across all six key areas—foreign exchange market liberalization, investor registration, information flow, clearing and settlement, capital transferability, and investment instru... Retirement Pension Provider Evaluation in Korea: its Significance and Reform [Senior Research Fellow] Nam, Chaewoo / Aug. 19, 2025 Korea’s retirement pension system is structured around a contract-based governance model that significantly relies on pension providers. As a result, the accountability and asset management capabilities of these providers are critical to the system’s overall performance. However, even two decades after the system’s introduction, satisfaction among plan participants remains rela... The Limitation of Fair Funds and the Proposal to Establish an Investor Protection Center [Research Fellow] Hwang, Hyunyoung / Aug. 19, 2025 To sustain the upward momentum of the securities market of South Korea (‘Korea’), it is essential to implement strong sanctions against unfair trading practices and strengthen investor protection mechanisms so that investors can trust and trade in the market. However, the current securities-related class action system lacks effectiveness in providing relief to victims due to st... Optimism Bias in Analyst Research [Senior Research Fellow] Kim, Joon-Seok / Aug. 05, 2025 In Korea, the share of “Buy” in sell-side analysts’ recommendations has increased from 67% in the 2000s to 89% in the 2010s, and further to 93% in the 2020s. This upward trend suggests that optimism in analyst research has persisted and become more deeply entrenched over the past two decades, raising serious concerns about the objectivity and credibility of the information prov... The Importance of Promoting Non-Financial Disclosure of Intellectual Property for Corporate Value Enhancement [Research Fellow] Jung, Heechul / Aug. 05, 2025 The importance of intangible assets, including intellectual property (IP), in corporate value has grown significantly due to technological advancements and the increasing sophistication of industrial structures. However, traditional financial information is limited in adequately reflecting the value of companies’ intangible assets. This exacerbates information asymmetry, making... Structural Reform of Korea’s Household Debt Management [Senior Research Fellow] Kang, Hyunju / Jul. 22, 2025 The Korean government currently manages household debt by setting annual debt growth targets in line with nominal GDP growth projections. However, this framework suffers from two structural limitations. First, the high level of uncertainty in nominal GDP forecasts often leads to frequent revisions, weakening policy consistency and eroding market predictability. Second, the mana... Korea’s Listed REIT Market: Current State and Structural Challenges [Senior Research Fellow] Kim, Pil-Kyu / Jul. 22, 2025 Korea’s listed REIT market has continued to grow, supported by government initiatives aimed at revitalizing the sector. However, most listed REITs currently trade below their initial offering prices, reflecting a real estate market downturn driven by rising interest rates and declining investor confidence. Notably, a recurring pattern has emerged in which new listings or follow... The Emergence of Korea’s Multi-Market Trading System: Early Impact and Regulatory Challenges [Senior Research Fellow] Kang, Sohyun / Jul. 08, 2025 Since its inception, Nextrade has experienced rapid growth, with average daily trading value reaching approximately KRW 10 trillion and trading volume nearing 300 million shares as of early June 2025. The introduction of extended trading hours, including pre-market and after-market sessions, has enhanced market accessibility and broadened investor choice, representing a meaning... Dark Pattern Regulation: Global Trends and Financial Sector Needs [Research Fellow] Jung, Soomin / Jul. 08, 2025 Following the amendment to the Act on the Consumer Protection in Electronic Commerce (the “E-Commerce Act”), six types of dark patterns—hidden renewals, drip pricing, default options, misleading interface design, cancellation hindrance, and repetitive prompting—have been prohibited as of February 2025. Except for hidden renewals, these restrictions also apply to the financial s... Foundational AI Innovation by Startups and the Role of Venture Capital [Research Fellow] Kim, Jinyoung / Jun. 24, 2025 Artificial intelligence (AI) is widely recognized as a transformative technology driving structural shifts in the global economy and society in the 21st century. The domestic development of foundational AI technologies has emerged as a key national priority for many countries. An analysis of arXiv, a key platform for tracking global AI research trends, shows that the US publish... Financial Asset Formation Among Young Adults in Korea: Recent Trends and Policy Implications [Research Fellow] Lim, Nayeon / Jun. 24, 2025 Young households in Korea hold a larger share of financial assets relative to total assets compared to other age groups. Their financial asset portfolios are heavily concentrated in savings and deposits, with limited exposure to risky financial assets such as stocks, bonds, and funds. However, since the COVID-19 pandemic, interest in risky financial assets has grown significant... An Analysis of Competitive Fee Reductions in Korea’s ETF Market [Research Fellow] Kwon, Min Kyeong / Jun. 10, 2025 Korean asset management companies have recently engaged in aggressive fee-cutting competition, particularly in ETFs tracking major US indices. This development reflects a strategic response to multiple factors, such as strong first-mover advantages in the ETF market, surging investor demand, and intensifying competition from US-listed ETFs. While this competition benefits inves... Reassessing the Safe Asset Status of US Treasuries [Research Fellow] Jang, Bosung / Jun. 10, 2025 The recent episode of market volatility in April this year has reignited questions about the status of US Treasuries as the world’s principal safe asset. These concerns stem from growing structural vulnerabilities in the US Treasury market, including worsening fiscal conditions driven by the Trump administration’s renewed push to extend tax cuts, the risk of radical exchange ra... DTCC’s Decentralized Platform Composer X: Implications for Korea’s Digital Asset Infrastructure [Senior Research Fellow] Kim, Kab Lae / May. 27, 2025 On February 4, 2025, the Depository Trust & Clearing Corporation (DTCC), the central securities depository (CSD) of the US, officially launched Composer X, a comprehensive platform for managing the full lifecycle of digital assets. Composer X is an end-to-end solution that supports all stages of the digital asset lifecycle, from issuance and distribution to administration and r... Climate Policy Reversal under the Second Trump Administration: Implications for Global Sustainable Finance [Senior Research Fellow] Choi, Soon Young / May. 27, 2025 The second Trump administration, inaugurated in January 2025, has initiated a swift reversal of the environmentally focused policies introduced under the Biden administration. On the international front, the administration has weakened global climate cooperation by withdrawing from the Paris Agreement and suspending contributions to global climate initiatives. Domestically, it ... Income Composition and Asset Holdings of Older Households in Korea: Challenges and Policy Implications [Senior Research Fellow] Kim, Jaechil / May. 13, 2025 The average income of older households in Korea has increased over the past decade. However, many of these households continue to participate in the labor market even at advanced ages, suggesting that a stable post-retirement income stream has yet to be secured. As observed in many other countries, this challenge reflects the concentration of lifetime savings in owner-occupied ... Reassessing Korea’s Stewardship Code: Implementation Status and Policy Challenges for Enhancing its Effectiveness [Research Fellow] Hwang, Hyunyoung / May. 13, 2025 Amid growing interest in capital market advancement and corporate value enhancement, the role of the stewardship code has gained renewed attention. In its 2025 policy agenda, Korea’s Financial Services Commission announced plans to improve the administration of the stewardship code to support more active shareholder engagement. This article assesses the progress and limitations... The Evolving Landscape of US Overnight Stock Trading Markets and its Implications [Senior Research Fellow] Lee, Sungbok / Apr. 29, 2025 Over the eight months since Korean broker-dealers suspended daytime trading services for US stocks, the US overnight stock trading landscape has undergone significant developments. The number of alternative trading systems (ATSs) offering overnight trading sessions has doubled from two to four, and major exchanges are preparing to enter the overnight trading segment. NYSE Arca—... Reassessing the Role of Korea Treasury Bonds in the Korean Financial Market [Research Fellow] Jung, Whayoung / Apr. 29, 2025 In Korea’s financial market, the role of Korea Treasury Bonds (KTBs) has expanded significantly across multiple dimensions. Above all, KTBs serve as a primary instrument for financing the government’s fiscal activities. As the role of fiscal policy expands, the government has increasingly relied on KTB issuance, a trend expected to gain momentum amid weakening private-sector gr... DeepSeek (深度求索) AI and its Implications for Innovation in Financial Services [Research Fellow] Noh, Sungho / Apr. 15, 2025 The recent success of the DeepSeek (深度求索) artificial intelligence (AI) model signals a notable shift in both the competitive landscape of generative AI development and the research and development (R&D) strategies of the financial services industry. DeepSeek AI is a reasoning model, which is the most advanced version of large language models (LLMs), and has demonstrated high le... Improving Tax Treatment for Private Pensions Amid Retirement Pension Reform [Research Fellow] Hong, Wonku / Apr. 15, 2025 In Korea, contributions to retirement pensions and the associated investment returns are tax-exempt, while withdrawals of retirement income are taxed. This tax treatment also applies to public pension systems such as Korea’s National Pension scheme. In contrast, contributions to private pensions, such as personal pension plans, are subject to tax credits.

The discrep... A Critique on the Trump Administration’s Stablecoin Promotion Policy [Senior Research Fellow] Shin, Bosung / Apr. 01, 2025 The Trump administration has publicly expressed its intention to promote privately issued stablecoins. However, allowing the private sector to issue stablecoins effectively entails transferring the sovereign privilege of money creation—traditionally an exclusive function of the state—into private hands, leading to potential side effects. When private entities are granted the po... Short Selling Resumption in Korea: Regulatory Reform and Market Implications [Senior Research Fellow] Hwang, Seiwoon / Apr. 01, 2025 Short selling of listed stocks is set to resume on March 31, 2025. Since short selling became a prevalent trading practice in Korea in the 2000s, there have been four complete short-selling bans in the Korean market. While the bans imposed in 2008, 2011, and 2020 were primarily aimed at stabilizing the market amid severe financial crises, the 2023 ban differs significantly in t... The Rise of Marginal Firms and the Implications of Stricter Delisting Criteria [Research Fellow] Lee, Sang Ho / Mar. 18, 2025 The recent reform announced by financial authorities to tighten delisting requirements represents a meaningful step toward restoring market confidence while facilitating the timely exit of marginal firms. This initiative aims to enhance capital market integrity by reducing inefficiencies in the delisting system. Notably, restricting firms with non-clean audit opinions to a sing... Korean Won Internationalization: Assessing Benefits, Risks, and Implications [Senior Research Fellow] LEE, Seungho / Mar. 18, 2025 Since the opening of its capital markets, Korea has significantly enhanced its foreign exchange crisis response capabilities over the past 30 years, evolving into a capital-exporting country. However, its outdated regulatory framework continues to prevent the Korean won from functioning as an internationally convertible currency, limiting the country’s ability to fully capitali... Assessing Income and Asset Adequacy for Korea’s Elderly Households: Implications and Policy Challenges [Research Fellow] Kim, Minki / Feb. 18, 2025 Contrary to intuitive expectations, elderly households in Korea exhibit a disproportionately greater reduction in consumption relative to their income decline while preserving their asset holdings. This trend can be attributed to insufficient retirement assets, difficulties in generating stable post-retirement cash flows, and rising longevity risks. Based on the analysis of Kor... Need for an Integrated Retirement Benefit System: A Policy Roadmap for Effective Transition [Senior Research Fellow] Nam, Chaewoo / Feb. 18, 2025 The mandatory integration of retirement benefit schemes—transitioning the severance pay system to the retirement pension system—is currently under discussion. A significant concern is that over 40% of overdue wage payments by SMEs, which have surged in recent years, stem from unpaid severance pay. This issue arises because most SMEs continue to operate under the severance pay s... Retail Investors’ Foreign Equity Investment: Characteristics and Implications [Senior Research Fellow] Kim, Hansoo / Feb. 04, 2025 Retail investors’ direct foreign equity investment has grown rapidly in recent years, with a significant concentration in specific regions and stocks, particularly US technology stocks. Korea’s unique direct foreign equity trading structure offers a distinct advantage in terms of accessibility. However, it should be noted that retail investors in Korea exhibit greater regional ... Strategic Entry into the M&A Advisory Market: Insights from US Boutique Investment Banks for Korea’s Smaller Securities Firms [Senior Research Fellow] Lee, Seokhoon / Feb. 04, 2025 Amid declining profitability in traditional business lines, small- and medium-sized securities firms in Korea face the challenge of identifying new growth engines. The experience of small-sized investment banks (IBs) in the US demonstrates that the entry into the M&A advisory market requires industry-specific specialization, expertise and tailored services. This suggests that t... Evaluating 20 Years of Private Equity in Korea: Achievements and Challenges [Senior Research Fellow] Park, Yong Rin / Jan. 14, 2025 Marking its 20th anniversary in 2024, Korea’s public equity (PE) has grown into a major investment vehicle with committed capital totaling KRW 136 trillion as of the end of 2023. It has played a pivotal role in mergers and acquisitions (M&A) and corporate restructuring in Korea, fulfilling its initial goal of counterbalancing foreign capital in Korea’s M&A market. Although in t... Current Status and Challenges of KOFR Adoption: The Importance of KOFR-Linked Bonds and Loans [Senior Research Fellow] Baek, Inseok / Jan. 14, 2025 Korea's benchmark rate reform has reached a critical turning point. The Benchmark Rates and Short-Term Money Market Council, a public-private collaborative body, has established a phased transition plan to expand the use of KOFR (Korea's Risk-Free Reference Rate), beginning with derivatives transactions in 2025. Since adopting RFRs in derivatives markets has been a cornerstone ... Current Trends and Outlook of Korea’s Credit Bond Market [Senior Research Fellow] Kim, Pil-Kyu / Jan. 02, 2025 Korea’s credit bond market experienced growth in issuance volume in 2024 amid interest rate declines. As of November 2024, the issuance of credit bonds surpassed the total volume recorded in the previous year, driven by increased investor demand for credit bonds.

Interest rate cuts have played a central role in driving this growth in the credit bond market, influenc... Demographic Changes in Korea: Implications for Household Asset Holdings and Capital Market Participation [Research Fellow] Jung, Heechul / Jan. 02, 2025 Korea is undergoing a profound demographic transformation characterized by rapid changes in age and cohort structures, which could influence household asset demand. This article examines the dynamics of asset holdings and capital market participation among Korean households, distinguishing between age-specific patterns and cohort-specific trends.

The analysis of age-... Dividend Record Date Reform: Progress and Challenges [Senior Research Fellow] Kang, Sohyun / Dec. 17, 2024 The dividend record date reform, introduced in January 2023, aims to enhance predictability for investors, bolster global investor confidence, and improve the competitiveness of Korea’s capital markets by determining dividend eligibility and dividend amounts prior to the record date. Although this reform marks a significant step toward increasing market transparency, its effect... Lessons from Trump’s First Administration and Implications for Trade Policies in the Second Administration [Senior Research Fellow] Kang, Hyunju / Dec. 17, 2024 This article explores the impact of Trump’s second administration on trade policies and the economy. The anti-intellectualism and populist orientation, characteristic of Trump's first term, are expected to persist during his second term. However, given the current economic landscape of elevated inflation and high interest rates, it is unlikely that Trump will fully implement hi... Challenges and Improvements of Publicly Offered Real Estate Funds in Korea: Insights from the German Model [Research Fellow] Kwon, Min Kyeong / Dec. 03, 2024 Korea’s market for publicly offered real estate funds (REFs) is experiencing a severe downturn, driven by the combined shocks of the Covid-19 pandemic and interest rate hikes. The market faces significant challenges, including the investment structure highly concentrated in a limited number of properties, small fund sizes, difficulties in building management expertise, and liqu... Privacy and Consumer Welfare [Research Fellow] Jung, Soomin / Dec. 03, 2024 Since the introduction of MyData services in 2022, financial consumers have gained access to new financial products, such as loan comparison and refinancing options and insurance product comparison and recommendation services. As these services have driven increased data collection and utilization by companies, various measures have been adopted to protect private information. ... Concept and Implications of DLT-Based Atomic Settlement [Senior Research Fellow] Kim, Kab Lae / Nov. 19, 2024 On October 25, 2024, legislative proposals concerning the issuance and distribution of security tokens were introduced in the 22nd National Assembly of Korea. This legislative package for security tokens is pivotal in establishing infrastructure for transforming the Real-World Asset (RWA) market into a tokenized ecosystem. Once the Bank of Korea’s projects for whole Central Ban... Navigating Inflation Expectations: Characteristics and Implications for Korea’s Monetary Policy Stance [Research Fellow] Jang, Bosung / Nov. 19, 2024 This article analyzes Korea’s inflation expectations from forecasters, revealing that divergence on forecasts for the current calendar year has widened at the beginning of each year, amid heightened uncertainty over post-pandemic inflation trends. However, as forecasts are adjusted throughout the year, forecasters generally incorporate relevant data into their projections, whic... Digital Platforms of Global Asset Management Companies: Strategies and Implications [Senior Research Fellow] Kim, Jaechil / Nov. 05, 2024 Digital platforms operated by global asset management giants provide comprehensive asset management services, including brokerage functions for financial investment products. These platforms have expanded into areas traditionally dominated by specialized financial solution providers, integrating key operations—such as portfolio management, risk management, and other back-office... The ASEAN Sustainable Finance Market: Current State of Development and Opportunities [Senior Research Fellow] Choi, Soon Young / Nov. 05, 2024 ASEAN is one of the world’s fastest-growing regions and projected to become the fourth-largest economic bloc by 2030. Economic ties between ASEAN and Korea have deepened significantly, with ASEAN ranking as Korea’s second-largest trading partner after China as of 2024. Currently, Korean financial services firms operate 172 overseas branches across ASEAN countries.

De... Policy Recommendations for Licensing Criteria of Korea's Fourth Internet-Only Bank [Senior Research Fellow] Lee, Sungbok / Oct. 22, 2024 The licensing approval criteria for Korea’s fourth internet-only bank are expected to be announced in November 2024. Accordingly, this round of licensing is anticipated to begin within this year. This new licensing focuses on micro and small businesses, and the key criteria for the licensing approval are expected to include the expansion of loan supply to micro and small busine... Network Separation Regulations for Financial Companies: Global Practices and Implications for Korea [Senior Research Fellow] Hwang, Seiwoon / Oct. 22, 2024 Korea’s network separation regulation for financial companies was initially introduced to minimize security failures in the financial sector, mandating strict physical network separation for many years. Given the rapid development of the ICT industry and the need for financial companies to stay competitive, a significant shift is required for the network separation regulation. ... Technology Neutrality in Financial Investment Regulations: Implications of Reg PDA [Research Fellow] Noh, Sungho / Oct. 08, 2024 This article examines the impact of Reg PDA, proposed by the U.S. Securities and Exchange Commission (SEC) in August 2023, on the financial investment industry with an emphasis on the concept of technology neutrality and discusses its implications in an era of digital transformation. The SEC has been facing opposition from the financial industry stakeholders as Reg PDA broadly ... Growth of Retirement Plan Assets: Key Factors and Implications [Research Fellow] Hong, Wonku / Oct. 08, 2024 By the end of 2024, the size of retirement plan assets is estimated to surpass KRW 430 trillion. The growth of these assets is primarily driven by wage increases, investment returns, and the number of plan participants. Between 2011 and 2023, the total value of retirement plan assets significantly increased 7.7 times from KRW 49.9 trillion to KRW 382.4 trillion. Meanwhile, the ... The Impact and Implications of a Shift in US Monetary Policy on the Won-Dollar Exchange Rate [Senior Research Fellow] LEE, Seungho / Sep. 24, 2024 The strength of the US dollar, which has been the primary driver of the won-dollar exchange rate increase over the past two years, is approaching a turning point due to potential changes in US monetary policy. With the Fed poised for an imminent rate cut, the US dollar is expected to gradually weaken, leading to an influx of global investment funds into Korea and exerting upwar... Key Characteristics of the Recent Surge in Individuals’ Bond Investment [Research Fellow] Jung, Whayoung / Sep. 24, 2024 Since 2022, when market interest rates rapidly rose due to aggressive monetary tightening, individuals’ bond investment has significantly surged. The characteristics of this investment vary by bond type. Investments in Korea Treasury Bonds (KTBs) have expanded, particularly in ultra-long KTBs with remaining maturities exceeding 20 years. Despite the high risk of price volatilit... The TMON and WeMakePrice Crisis: Key Issues and Challenges [Senior Research Fellow] Shin, Bosung / Sep. 03, 2024 Recently, the misappropriation of sales proceeds by large open market platforms has caused significant market disruptions in Korea. To prevent such incidents from recurring, business entities, including open market platforms, should be prohibited from concurrently operating as a payment gateway (PG). Also necessary is the separation of a PG’s proprietary account from its paymen...