Korea Institute of Finance

Financial Research Brief

25-20 Oct 25, 2025

Policy Directions for Enhancing Stability in the Domestic Repo Market

Driven by changes in market practices and policy support from regulatory authorities, the domestic repo market in Korea has developed into a central pillar of the short-term funding market since the global financial crisis, achieving rapid quantitative growth in recent years. The domestic repo market is notable for its broad representation across financial sectors and its systemic importance, serving as the underlying foundation for Korea Overnight Financing Repo Rate (KOFR), the country’s risk...

Financial Review Namjong Kim

Domestic Banks' First-Half Performance and Future Outlook

Policy Issue in Focus Byungyoon Lee

Strengthening Suitability Principles for High-Risk Investments and the Tasks Ahead

Policy Issue in Focus KyooBok Lee

Financial Characteristics of Financially Distressed Firms and Policy Implications

Policy Issue in Focus Jun-Tae Park

FSC Unveils Tighter Lending Rules Amid Rising Home Prices, Oct 2025 (FSC)

News Briefs KIF

Regulating Currency-Referenced Stablecoins: Between Virtual Assets and Money

This paper addresses the growing policy debate on fiat-referenced stablecoins, examining their risks, the need for regulation, and lessons from leading jurisdictions. Stablecoins that reference fiat values and promise redemption introduce distinctive challenges compared to virtual assets. The analysis highlights their linkages with the financial system, risks to user protection, and potential misuse for illicit activities, underscoring the necessity of a dedicated regulatory framework. Drawing o...

20250919 JEONG DOO LEE

Introduction of central clearing house (CCP) in domestic repo market and its effects

This report examines various issues related to the introduction of a central clearing house (CCP), a measure that has long been proposed to enhance the stability of the domestic Repo market. The introduction of a CCP is widely regarded as a key approach to improving stability and transparency in financial markets, particularly those dominated by bilateral transactions. Firstly, this report reviews the flow of discussions surrounding CCP implementation, focusing on international debates that emer...

20250813 Young Do Kim

Assessing the Stability of Korea's Repo Market and Directions for Regulatory Reform: With a Focus on Drivers of KOFR Fluctuations

This study analyzes the driving factors of the volatility of Korea’s repo rates - a long-standing issue raised by market participants ? using daily transaction data from the domestic OTC inter-instititional repo market. Following regulatory reforms in the 2010s that reshaped the short-term money market around repos, the repo market has expanded rapidly each year, and now plays an increasingly pivotal role as the market underpinning KOFR, Korea’s Risk-Free Reference Rate (RFR). First, the st...

20250805 Namjong Kim

Challenges in Shifting from Conventional Real Estate-Based Lending to Financing Focusing on Business Viability

Recently, the increase in South Korea's debt has been primarily driven by household mortgage loans and corporate real estate-related loans, leading to heightened financial risks. This concentration in real estate lending could, in the event of an economic downturn, increase the principal and interest repayment burdens for households and companies, causing a rise in delinquencies. This, in turn, could create a vicious cycle where financial institutions tighten risk management and real estate pric...

20250722 Seok Ki Kim, Yeonju Baik, KyooBok Lee

Global ESG Initiatives and Their Impact: The Case of RE100

Since the 2015 Paris Agreement, private-sector efforts to address climate change and reduce carbon emissions have expanded, with ESG and sustainability initiatives becoming an important part of this trend. However, rigid targets, complex standards, and the absence of legal requirements have raised skepticism and concerns about greenwashing. In this context, this study examines the impact of RE100 on corporate environmental performance. After joining RE100, companies generally increased their use...

20250708 Jiwon Park

The Impact of Climate Change Physical Risks on the Insurance Industry and Tasks Ahead

This study empirically investigates the impact of climate change?specifically extreme precipitation?on the financial performance in the Korean insurance industry. Using climate projections for the period 2021 to 2040 under four representative climate scenarios provided by the Intergovernmental Panel on Climate Change (IPCC), we estimate potential damages from natural disasters and project claims paid and loss ratio for three major policy types: crop insurance, livestock disaster insurance, and...

20250627 Sukho Lee, Sangyong Han