Korea’s development experience has been a source of inspiration for many developing countries. Learning from Korea’s success, its effective policy setting and decision-making offers valuable guidance for policy makers in developing countries. Recognizing the value of leveraging Korea’s experience and expertise in development work, the World Bank has partnered with Korea through technical cooperation and knowledge transfer in several areas.
Financial sector is no exception. For many developing countries, Korea’s experiences in managing financial stability and building stronger systems following the 1997 financial crisis provides useful lessons to assess, adapt and design their own policy options.
Naturally, the Seoul Center has a focus on engaging Korean institutional partners to share Korea’s financial development experience when advising relevant issues in World Bank client countries. For example, one way Korea strengthened its financial oversight of the financial system after the crisis was to establish an integrated financial supervisory framework under the Financial Supervisory Service (FSS).
FSS’s experience and expertise as a supervisor is well recognized across the globe and the Seoul Center signed an MOU with them in 2015 to collaborate in knowledge sharing and technical assistance for the Bank’s client countries. Besides FSS, the Center has established partnerships with more than 20 Korean financial agencies such as Bank of Korea (BOK), Financial Services Commission (FSC), Korea Deposit Insurance Corporation (KDIC), Korea Securities Depository (KSD), Korea Financial Intelligence Unit (KOFIU) and Korea Asset Management Corporation (KAMCO) to date. The Seoul Center also creates opportunities to leverage financial experts of Korean partner institutions to enhance World Bank analytical and advisory services to client countries in EAP.
“Strengthening legal, regulatory and supervisory frameworks and supporting priority reforms in the financial sector through bringing high quality advisory services, sharing best practices through partnerships in Korea and building relevant capacity are at the heart of Seoul Center’s mission” says Sameer Goyal, Program Manager of the Seoul Center.
Since 2012, the Seoul Center has supported a total of 17 advisory and analytical programs for the Finance, Competitiveness and Innovation (FCI) GP in the EAP region, representing 10 countries and 4 regional initiatives. Of the 17 projects, 8 are completed and most of the remaining projects are scheduled to be completed by December 2018. Several critical reforms were supported, and many diagnostic and advisory services were delivered through these programs.
Promoting innovation in finance and related regulation is one of Seoul Center’s important goals and that’s why together with the FSS and Asian Development Bank (ADB), the Seoul Center co-organized a financial regulators conference in 2016 on “Fintech – Avoiding the Pitfalls, Reaping the Benefits” in Seoul. The conference brought together 50 participants from APEC country central banks, securities commissions, other financial regulatory agencies and standard-setting bodies as they exchanged ideas and views on fintech’s impact on regulation and how regulators should respond to this innovation.
The Seoul Center’s Korea-based team continued to provide direct technical support to EAP engagements by leading or participating in missions and producing analytical reports. In FY18, the team supported NPL resolution, SME finance and agriculture finance in the Philippines, securities market supervision in Vietnam, capital market development and development bank reform in Mongolia, and assessment of correspondent banking in Samoa.
In FY18, the Seoul Center also successfully launched the 2nd phase of its partnership with the Korean government, which builds upon the good results of the first phase (2012-2017) to support much-needed financial sector reforms in the EAP region. The thematic focus of the 2nd phase support is financial stability and soundness, responding to the need to address financial sector vulnerabilities in the EAP region.