Korea Investment Corporation: Its Origin and Evolution

55 Pages Posted: 8 Aug 2011

See all articles by Woochan Kim

Woochan Kim

Korea University Business School; European Corporate Governance Institute (ECGI); Asian Institute of Corporate Governance (AICG)

Date Written: August 1, 2011

Abstract

In this paper, I give a detailed account of the creation and the evolution of Korea Investment Corporation (KIC) – a sovereign wealth fund established in 2005 by the Korean government. In doing so, I highlight three of its unique features. First, the case of KIC effectively shows the problem of having an unclear mission statement, which allows the mission to evolve over time and multiple missions to coexist that may contradict each other. Second, it effectively reveals the typical conflicts that may arise between the central bank and the ministry involved when setting up a reserve-based sovereign wealth fund. Third, it effectively shows how a sovereign wealth fund can be operated in a way that favors the bureaucrats and the politicians.

Keywords: sovereign wealth fund, FX reserve, currency crisis, FX swap, Korea

JEL Classification: F31, F34, G15, G23, G28, P16

Suggested Citation

Kim, Woochan, Korea Investment Corporation: Its Origin and Evolution (August 1, 2011). Available at SSRN: https://ssrn.com/abstract=1903557 or http://dx.doi.org/10.2139/ssrn.1903557

Woochan Kim (Contact Author)

Korea University Business School ( email )

LG-POSCO Bldg #524
Anam-Dong, Seongbuk-Ku
Seoul, Seoul 136701
+822-3290-2816 (Phone)
+822-922-7220 (Fax)

HOME PAGE: http://biz.korea.ac.kr/professor/wckim

European Corporate Governance Institute (ECGI) ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Asian Institute of Corporate Governance (AICG) ( email )

1, 5-ga, Anam-dong
Sungbuk-gu
Seoul, 136-701
Korea, Republic of (South Korea)

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