The purpose of this paper is to search for an optimal
banking structure which will be driven by financial market
forces in liberalized financial environments. This paper takes the
view that financial regulation and systems will ultimately be
endogenized and driven by market forces. Therefore, the optimal
policy is to allow the actual financial system or structure to
evolve in response to and commensurately with the market
force-driven system. In this view, the main function of
government banking policy is to facilitate the evolution of the
banking structure which is anticipated under a fully liberalized
financial environment, while limiting financial regulation only to
assure depositors that their money is safe in order to avoid the
inherent, systemic risk stemming from the deposit business.

Ⅰ. Introduction
Ⅱ. A Theory on the Scope of Financial Activities
Ⅲ. Financial Structure and Financial Development
Ⅳ. Scale and Scope of Financial Development
Ⅴ. Scale and Scope Economies and Prospects for the Banking
Structure: The Case of Korea
Ⅵ. Suggestions for Korea`s Optimal Banking System