Korea Institute of Finance

Financial Research Brief

25-22 Nov 22, 2025

On Stigma Effects Associated with Corporate Rehabilitation Filings

This paper examines whether Korea’s corporate rehabilitation system exhibits a stigma effect that hinders firms’ access to external finance. Using firm-level credit data for 2,487 rehabilitation filings between 2018 and 2024, this paper documents substantial shifts in firms’ primary banking relationships around the time of filing, including a persistent transition from commercial and policy banks toward policy-backed financial institutions for SMEs. While the analysis does not establish causa...

Financial Review YongKi Hong

Overseas Cases of Government-Backed Microfinance and Policy Implications

Policy Issue in Focus Soo Jin Lee

The Fund-Based Retirement Pension: Outlook and Key Policy Implications

Policy Issue in Focus Byung-Duck Kim

FSC Launches New Low-Interest Loan Program for Long-Term Debtors, Nov 2025 (FSC)

News Briefs KIF

Legal measures to promote trust business ? focusing on the Japanese case

With the recent advancement of a super-aging society and the growth of household assets, trusts receive attention as a means of managing and operating assets. Furthermore, there is a growing demand for trusts, particularly among small and medium-sized enterprises and innovative companies, to securitize their assets and raise funds. However, the adequate response to this demand remains questionable. Japan entered an aging population and matured economy ahead of Korea, and this process has expande...

20251128 Young Kyung Lee

The Impact of Business Diversification on Profit Stability of Korean Bank Holding Companies

The Korean financial industry is facing limitations in its traditional interest margin model due to the low interest rate environment and fintech market entry, leading bank holding companies to actively pursue diversification strategies by expanding into non-banking sectors such as securities, insurance, and credit cards. However, there is a need for objective verification of whether such business diversification actually has a positive impact on the profitability and soundness of bank holding ...

20251118 Taiki Lee, Woojin Kim

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