South Korea has the second highest debt-to-disposable income ratio in the world, but Choongsoo Kim, governor of the Bank of Korea, insists that the country’s financial system is not at risk, and suggests that balancing the focus between export and domestic demand will lead to sustainable economic growth.

While South Korean manufacturers have achieved global success, the country’s banks have struggled to break out of the domestic market. The government is now looking to introduce new regulations aimed at boosting the international competitiveness of its financial institutions. 

While South Korea's commercial banks have just enjoyed a record year for earnings, any joy within the country's banking sector has been quelled by problems within its debt-saddled mutual savings banks.

Despite falling into a major economic trough in the first quarter of 2009, the majority of South Korea's banks are poised for a stable recovery in 2010. But the unwinding of stimulus packages worldwide and the risk of a possible double-dip global recession in the West continue to threaten the Korean banking sector. Writer Mee Hyoe Koo

South Korea's Kookmin bank issued the first covered bond out of an emerging market earlier this year. It was lapped up by investors although its pricing has been questioned. But more importantly, is it the first of many other emerging market banks to look to covered bond investors for funding? Writer Joanne Hart