The purpose of this paper is to improve the compliance level in the Korean financial services market by proposing a more systematic approach to economic crimes. As one of the most important capital markets in Asia, the Korean financial services market has weathered well both the hardship of the Asian financial crisis and the challenges of the Great Recession. Thus, its policy directions and experience are valuable to other burgeoning capital markets around the world. This paper contributes to a better understanding of the compliance system in the Korean financial services market. Based on a literature review, this paper analyzes the three groups of counter-measures—criminal sanctions, administrative sanctions, and civil remedies. Currently, criminal sanctions on individuals are overly relied upon; administrative sanctions on corporate entities have become increasingly important; civil remedies by the damaged are not effective; and preventive efforts have been disregarded. The ultimate goal of regulations is to let regulated entities comply with legal requirements. With respect to crimes in the financial services market, educational and compliance programs should be implemented as important built-in enforcement tools. Enforcement mechanisms should encompass preventive and educational efforts. Further, redesigning new compliance structures based on education will free market players from fastidious regulatory policies and discretionary criminal indictment, and improve the trust in the financial system with minimal social costs.
Legal Compliance and Korea's Financial Services Market: A Strategic Approach,
20 Pac. Rim L & Pol'y J.
Available at: https://digitalcommons.law.uw.edu/wilj/vol20/iss3/2