Liberalization of Asian capital markets : its merits and pitfalls

Abstract

본 논문은 최근의 동아시아 위기와 관련하여 활발하게 논의되고 있는 자본시장 개방화에 대해 고찰해 보았다. 우선 자본시장 자유화가 동아시아 국가들의 경제위기와 어떤 연관성이 있는지를 개발도상국들의 과거경험 자료와 더불어 살펴 보았다. 다음으로는 자본 시장 자유화가 과연 국가경제에 악영향만 미치는 것인지, 아니면 어떤 다른 긍정적인 효과를 가지는지를 고찰해 보았다. 자본시장이 개방됨으로써 얻을 수 있는 긍정적 효과로는 자본축적과 생산성 향상, 위험 분산과 복지증진 등이 거론되었으며 위험요인으로는 국제시장에 대한 민간성, 자본의 급격한 변동성 등이 고찰되었다. 마지막으로는, 자본이 유입되었을 경우 발생할 수 있는 이러한 위험요소들을 어떻게 조절해 나갈 것인가에 초점을 맞추었다. 첫째는 동아시아 국가들에게서 보여진 고정 환율제의 문제점들을 바탕으로 변동 환율제를 조심스럽게 제시하였으며, 둘째는 금융시스템을 강화하고 기업 지배구조의 개선을 통해 위험요소를 최소화하는 방안을 제시하였다. 끝으로는 법제도와 각종 인센티브를 통해 시장이 안정될 수 있도록 대안을 제시해 보았다. ; Developing countries have been advised to open up their financial market by the developed countries armed with the theory that liberalizing capital flow controls improves efficiency in local capital markets, allows residents to spread risks and helps to reduce downward pressure on the real exchange rate. In accordance with this trend and their own necessity, the volume of private capital flows to East Asian countries rose more than fivefold during from 1990 to 1997. This expansion was caused by the fact that there were not appropriate countries to invest in for the people who searched for higher returns to capital. Macroeconomic policy in East Asia also reinforced circumstances for private agents to abuse the easy access to international capital. However, there was no cushion to absorb the shocks that fast capital flows might cause. It is true that financial intermediaries in East Asia has not been well prepared and organized. Then, do capital flows have only bad effects on developing countries? It needs to be investigated with its merits and demerits. One category of benefits includes increased investment and more efficient allocation of resources. The other benefits are risk sharing and welfare improvement. However, to be sure, such impact may depend on the state of the economic policy environment in individual countries. The risks associated with capital account liberalization can be elaborated into several arguments. The first is that international factors such as international interest rates can trigger surges and reversals of capital flows. The second argument is that international capital market failures can aggravate domestic financial weaknesses and have contagion effects on other. Finally, the risks discussed so far hinge on the volatility of capital flows, and on the risks of reversal during bad times, when access to additional financing is especially important. As conclusion, this thesis investigates how to manage the risks of capital flows and to take advantage of the benefits. First, flexible exchange rate system is suggested. In the face of a surge in private capital flows, fixed or pegged exchange rates may be increasingly untenable because of their implications for domestic macroeconomic goals, the inflationary pressures they generate and the incentives they create for private agents to overborrow. Second is to support the financial system and improve corporate governance. Finally, the necessity to strengthen domestic banks through better regulations and market incentives is examined.