By Yoon Ja-young
Staff Reporter
Korea has slid in financial development ranking by four notches to 23rd, giving warning sign to its vision of becoming a financial hub in East Asia.
The country scored 3.91 out of 7 in the financial development index, according to "The Financial Development Report 2009" released by World Economic Forum, Thursday.
It ranked 23rd among 55 countries, falling four notches from last year when it was ranked at 19th with 4.55.
Singapore was ranked at 4th, followed by Hong Kong, showing that Korea has a long way to go until it becomes competitive enough to compete with rivals over the Asian financial hub status.
The index measures financial development in seven pillars ― institutional environment, business environment, financial stability, banking financial services, non-banking financial services, financial markets, and financial access.
The country ranked at 16th in terms of business environment, but its financial stability ranked at 28th and institutional environment at 31st.
It was especially poor in terms of financial access ― ranking at 52nd.
"Korea's overall ranking of 23rd in the FDI is bolstered by strong scores across its business environment. Key strengths include a healthy pool of human capital supported by a high tertiary enrollment rate, and the high quality of math and science education," the report said.
It highly evaluated the low cost of doing business and healthy telecommunications infrastructure.
"However, despite these competitive advantages, financial access in the country is highly constrained (52nd), with poor marks for both commercial (47th) and retail (45th) access to capital," it added.
The United States, which topped the list in last year's report, fell to the third place following the United Kingdom and Australia, which made a big jump from 11th notch of the last year.
Nouriel Roubini, professor of New York University, was lead academic and co-author of the report.
"The United States achieves very low scores in overall financial stability. Particular disadvantages are evident in currency stability and banking stability measures. The banking system in general also exhibits signs of weakness, with relatively lower scores in size and efficiency," the report said.