Abstract

Executive Summary. The objective of this article is to serve as a primer for international investors who have an interest in the Korean Mortgage Backed Securities (MBS) market. Among all Asian countries except Japan, the Korean bond market has been the largest during the last few decades. Due to strict government control, the market was closed to foreigners prior to the 1990s. In recent years the government has relaxed these restrictions and made substantial progress in improving market efficiency. Some international investors have begun to realize the potential of the MBS market in Korea, and have invested in high quality MBS with attractive yields. This article will provide an introduction to the Korean MBS market and offer considerations for MBS investors, such as the mortgage market in Korea and the extent of government control.

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