The purpose of this paper is to discuss Korea`s experiences
of interest rate and capital flow deregulation in recent years and
to analyze the effects and implications of those liberalization
measures for the conduct of domestic monetary policy and for
the future prospects of domestic financial structure. Experiences
of interest rate deregulation and capital flow liberalization will be
reviewed in section Ⅰ and Ⅱ, respectively. In section Ⅲ,
implications of interest rate deregulation for the monetary policy
will be discussed, especially focussing on the case of the first
attempt at interest rate deregulation in December 1988. In section
Ⅳ, the future prospect for Korea`s financial structure under a
fully liberalized financial environment will be speculated, based
on the empirical evidence of Korea`s banking industry. The last
section will conclude the paper.

Ⅰ. Interest Rate Deregulation
Ⅱ. Capital Control Deregulation
Ⅲ. Interest Rate Deregulation and Monetary Policy
1. Effect on Money Demand
2. Effect on Money Supply
Ⅳ. Financial Liberalization and an Optimal Structure of Financial
Industry
1. Theory on the Scope of Financial Activities
2. Scale and Scope Economies and Prospect for the Banking
Structure: the Korean Case