Implication of Financial Reforms in China and Vietnam for North Korea

Ho Yeol Lim () and Ho-Kyung Bang ()
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Ho Yeol Lim: Korea Institute for International Economic Policy
Ho-Kyung Bang: Korea Institute for International Economic Policy

No 16-12, World Economy Brief from Korea Institute for International Economic Policy

Abstract: North Korea's financial system is based upon a mono-banking system, centered on the Central Bank of the DPRK. The Central Bank of the DPRK serves diverse functions - aside from financial activities, it also acts simultaneously as a central bank and a commercial bank. From the experiences of China and Vietnam's financial reform, we draw several implications for North Korea. With the enactment of the Central Bank Law and Commercial Banking Law, North Korea has already laid the institutional foundations for financial reform. What matters is to draft and carry out specific plans for implementation, create an environment conducive to its enforcement, and to continuously put the plan to practice. It is imperative to ensure the explicit prohibition of financial asset provisions via the central bank, to guarantee the smooth transition to commercial banks taking on the primary role in savings and deposits, to acquire substantive tools for currency and foreign exchange market operation, and to stimulate both the capital and foreign currency markets.

Keywords: North Korea; Financial Reforms (search for similar items in EconPapers)
Pages: 5 pages
Date: 2016-05-17
New Economics Papers: this item is included in nep-cna
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