Regulatory straitjacket?

South Korea introduced a raft of new legislation with the aim of helping make Seoul a world-class financial centre prior to the financial crisis. But the events of 2007–08 proved a game changer as regulators grappled with the damage wreaked by kikos and other problems. Subsequent new rules have created significant barriers to entry and may be thwarting the country’s international ambitions. Harry Thompson reports

In the good times before the global financial crisis, Korea appeared to be a ‘model student’ of the International Monetary Fund. To build on this, it was making noises about opening up its capital markets to international competition. The government’s stated aim for some time has been to turn Seoul into an international financial hub or, at the very least, a regional one. And the authorities have introduced several pieces of significant new regulation during the past two years to help this