MSCI chairman says Korea's developed-market upgrade may come sooner

Henry Fernandez, chairman of Morgan Stanley Capital International (MSCI), said on Nov. 6 that Korea's inclusion in the MSCI developed markets index is a matter of timing, but added that it remains to be seen whether institutional reforms are actually implemented.

Speaking at an international conference hosted by the World Economy Research Institute and KB Financial Group at the Fairmont Ambassador Seoul in Yeouido, Seoul, Fernandez said, "I think it is a question of timing," adding, "It could happen sooner."

He positively assessed the Korean government's will to reform capital markets and the progress made so far, but stressed that changes international investors can feel are needed.

Fernandez said, "MSCI, acting on behalf of international investors, needs to confirm their needs," explaining that while the Korean government is pursuing necessary reforms, institutional improvements must translate into implementation to reach the final stage.

He added that he conveyed to government officials that there are still difficulties with won settlement in the spot foreign exchange market.

On the sharp decline in U.S. and Korean stock markets after the U.S. midterm elections, he assessed that the long-term direction—that massive investment in artificial intelligence (AI) is necessary—is clear. However, he predicted that considerable volatility could occur as the technological revolution unfolds.

He warned that global economic growth is predicated on the expansion of data centers, and if data center construction halts, the global economy could enter a recession.

He also expressed the view that Korea, with its large share of trade, could be significantly affected, but this should be seen as difficulties experienced in the process of long-term change. He explained that given competition with China and other factors, it would be difficult for the United States to completely halt AI investment.

At the event held under the theme "New Growth Paradigm in the AI Era: The Evolving Role of Finance," concerns about overheating AI investment were also raised.

Joseph Stiglitz, a Nobel laureate in economics and professor at Columbia University, who attended via video, said, "The bubble is growing, and when it bursts, the impact on the global economy will be more severe."

Stiglitz pointed out that investors need to examine whether there are conditions to realize expected returns and whether there is a will to connect AI's potential to the benefit of humanity.

He suggested that AI opens the possibility of realizing "super abundance," and that the roles of the public and private sectors should be rebalanced, with investment directed to areas of high social value such as education, health, and care, so that economic gains are broadly shared.

Victor Cha, Korea Chair at the Center for Strategic and International Studies (CSIS), a U.S. think tank, predicted that the Trump administration will focus on implementing investment commitments to the United States going forward.

Cha cited the possibility of Chinese military action and economic pressure, naming China as the most concerning external variable next year.

He noted that in a survey of voters in battleground states for the U.S. midterm elections, a majority, regardless of party affiliation, responded that foreign policy has a significant impact on daily life and that supporting U.S. democracy is important.

On the midterm election results, he positively assessed that U.S. politics could move toward the center and unpredictability could decrease.

※ This article is an AI translation of the Korean original published by Korea Credit News; it was checked by automated quality guards and published by the English edition desk.