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Korea’s banking industry underwent incredible growth in the last 50 years and the role of corporate governance has become ever more important. It is now generally accepted that corporate governance is essential for a healthier and stronger banking industry. This is especially relevant because banks directly affect the stability of Korea’s financial market and the development of its national economy. Reforming the corporate governance of Korean banks can therefore help prevent financial crises in the future. This paper provides an overview of Korea’s economy and banking industry, and explains their relationships with corporate governance. While there are different aspects to corporate governance of banks, this paper focuses on risk management because it plays a crucial role. This paper concludes by making several recommendations for a more effective risk management system to promote healthier Korean banks.