South Korea's Experience with International Capital Flows

Working Paper
June 2005

Marcus NolandFinancial repression, including capital controls, was an important part of South Korea's development strategy, but the transition toward a more market-oriented system proved problematic, contributing to the 1997-98 financial crisis. Despite considerable reforms undertaken since the crisis, South Korea's lending culture and the limited ability of South Korean authorities to regulate a more market-oriented financial system continue to impede growth.