The Korean government has identified the need to ‘improve the structure of the foreign exchange market’ as a pivotal step in aligning the accessibility of the foreign exchange market with global standards that foster a more open and competitive market structure. This plan can be summarized in the following two ways. One is to overhaul foreign exchange laws and regulations. The foreign exchange transactions of domestic individuals, enterprises, and financial institutions are governed by the Foreign Exchange Transaction Act, which was enacted in 1999, and the government intends to reform it in line with the changes in the domestic and external economic environment. The other is to strengthen the foreign exchange market infrastructure. The government plans to introduce electronic trading methods in the foreign exchange market, allow foreigners to participate in the interbank market and extend the trading hours of the foreign exchange market. By improving the foreign exchange market structure, Korea will be more in line with the trend of financial globalization that began in the 1970s. Financial globalization refers to the process by which global financial markets are becoming more interconnected and integrated, although assessments of financial globaliza￾tion are mixed. Financial globalization has contributed to expanding access to capital at the national level, reducing the cost of capital, December 1, 2023 2 The Structural Improvement for Korea’s Foreign Exchange Market and Its Implications on Korean Economy and diversifying external portfolios through international risk-sharing, although it has also led to increased volatility in domestic financial markets and the transmission of external shocks through international financial markets, sometimes resulting in financial crises in some countries. The benefits of financial globalization have been different for advanced and emerging economies. Emerging economies can raise scarce capital through international financial markets, while developed economies can earn higher returns by deploying their capital abroad. In the process, a Pareto improve￾ment could be achieved worldwide.