In order to resolve the potential problem of consumer loans and introduce the long-term mortgage system, Korean government established Korea Housing Finance Corporation in March, 2004, It is expected that the introduction of the mortgage system would ...
In order to resolve the potential problem of consumer loans and introduce the long-term mortgage system, Korean government established Korea Housing Finance Corporation in March, 2004, It is expected that the introduction of the mortgage system would play a positive role not only in improving the welfare of low-income families, but also stabilizing the financial market by extending maturities of the housing loans. This paper studies the effects of establishing Korea Housing finance Corporation on the Korean economy, especially on the financial market. It is believed that the long-term mortgage system practically opens the long-term capital market in Korea, which has been an obstacle for the development of Korea financial market. This Paper concludes with some suggestions on policy issues for the development of the mortgage system.