Investigate and analyse the financial system of South Korea, Its level Essay

Investigate and analyse the financial system of South Korea, Its level of development,The efficiency of its financial markets,an - Essay Example South Korea established a central bank in 1950 that was given the mandate of regulating all the other banks in the country, printing and circulation of the currency in South Korea as well as making laws and regulations that would govern other financial institutions in the country. The minor banks in South Korea had a function of extending credit services to businesses and other medium and long term investment projects (pg 48). Today, the financial system of South Korea has grown and continues to improve remarkably over the years. South Korea is located in the north-eastern Asia and it is bordered by the Yellow sea to the west and Democratic Republic of Korea to the north. South Korea has four distinct seasons and in 2011, the population was estimated to be 48.75 million people with the annual growth rate in population estimated to be 0.23%. South Korea is characterized by low birth rate and high life expectancy at an average of 82 years for women and 75 years for men but the literacy levels are high with compulsory schooling for the first 9 years. This has greatly been affecting the economy of South Korea because most of the population is made up of the old people. The major religions in South Korea are Christianity, Buddhhism, Shamanism, Confucianism and Chondogyo. Politically, South Korea has a well organized government by the president, the parliament and the judiciary. Power was well laid out in the constitution that was appealed in 1987 (Kim & Black, 2004). South Korea has had a well performing investment sector especially in agriculture and other medium and long-term investments. This sector has been an integral part of the economy of South Korea and the banks even offered loans that would be channeled towards these businesses. They contributed to the growth of South Korea’s GDP that has improved though it had staggered for some time due to hard economic times that South Korea went through for some time (Lau, 1996). The depository sector of the fin ancial system has also been improved over the years where unlike the times when banks were solely owned by the government, the people have been allowed the freedom to have shares in the banking sector and the banks have started offering depository services for their customers (Lee, 2004). This has strengthened the financial system of South Korea and has ensured that there is constant growth in the sector. In the recent years, South Korea’s financial system moved from the government ownership to more widespread powers where people were allowed to participate directly through the purchase of shares. This was contributed to by the increases reforms and strategies that were geared towards attainment of stability in the financial markets. Over the past 10 years, The GDP of South Korea has experience fluctuations in GDP with a 9% growth in 2009 and 6.1% being recorded in 2010. This was due to changes in economic situations globally and changes in the level of exports in the country over the years. South Korea’s financial system has improved significantly and it has even gone ahead to sign business agreements with North Korea that are aimed at improving the exports in the country hence ensuring the country a growth in the GDP and Foreign Direct Investment (FDI) (Zahid,1995). The growth of the financial institutions in South Korea have been so much affected by the aging population, strict labor laws, poor management of the institutions, underdevelopment of the