Juyeol Lee: Inaugural address
Inaugural address by Mr Juyeol Lee, Governor of the Bank of Korea, Seoul, 1 April 2014.
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Dear fellow members of the Bank of Korea!
It has been two years since I left the Bank, and I am overwhelmed to be seeing you all again.
While taking it as a great honor to be appointed Governor of the Bank of Korea, where I have
worked for all but the last two years of my entire career, I at the same time feel an enormous
sense of responsibility to devote myself to bringing our economy up onto a strong foundation.
But although I feel weighted down with important duties, I must also say that I feel reassured
to be with our seasoned MPC members equipped with their very valuable experience, and
with colleagues who always do their best at every responsibility given them.
Taking this opportunity, I would like to express my gratitude to my predecessor Governor
Choongsoo Kim, for his leadership at the Bank of Korea over the past four years. I would like
to ask Governor Kim for his unstinting guidance and support, for the development of our
national economy and the Bank.
Dear Bank of Korea colleagues!
I think you are all well aware that, on the occasion of my appointment as Bank of Korea
Governor, discussions on the role of the Bank of Korea have been active in every corner of
society. Watching these discussions, I have been able to reaffirm that the people's
expectations of the Bank have become higher and more varied than ever before. Since the
2008 global financial crisis a consensus has been reached that the central bank must
promote financial as well as price stability, and in reflection of this financial stability has been
added to the Bank of Korea's mandate. Recently, as concerns about a secular decline in the
potential growth rate have arisen, the opinion has gained interest that monetary policy's
focus should be placed on economic growth and employment as well.
And I think that the reason these multilayered demands, which sometimes even conflict with
each other, are being raised so strongly, is that the environment surrounding us has changed
so greatly compared to the past.
Although the advanced economies are gradually recovering, they have not yet fully emerged
from the shocks from the crisis. It is also uncertain whether China, which has risen as one of
the G2 along with the U.S., will be able to continue its stable growth. The QE policies
conducted by the U.S., Japan and other advanced economy central banks to overcome the
crisis were so unprecedented that it is difficult to predict the channels, the extents and the
intensities of their impacts. There is a view that the expanded liquidity supplied will create
new bubbles, while the U.S. Federal Reserve's QE tapering beginning from last year has
also caused financial instability in some EMEs.
Our Korean economy is also confronting many difficulties. Our growth potential is weakening
due to the slowing rate of increase in our economically active population, to sluggish
corporate investment stemming largely from the uncertainties about the business outlook,
and to regulatory hurdles. Income and wealth gaps across industries, corporations and
individuals have widened, as the fruits of growth have not been evenly divided. Excessive
household debt, which constrains private consumption, is not only weighing on growth, but
also narrowing the scope for our macroeconomic policy operations.
My dear friends and colleagues,
I would like now to share with you some of the things that I will keep in mind during my
governorship.
First, I believe that the role and responsibilities of the Bank of Korea must be redefined, in
line with the changes in the economic structure and the external environment. We need to
consider deeply how to meet the people's demand that the current monetary policy
framework pursue not only price stability but also financial stability and economic growth, in
harmony. There is a need for us to review and discuss in earnest how our policy objectives
and instruments should be changed to accommodate this new demand for an evolution of
the Bank of Korea's role. If social consensus on this is reached, even if it takes time, the
Bank of Korea will develop into a more advanced central bank.
Next, we need to devote our utmost efforts to achieving a rebirth of the Bank of Korea as a
central bank trusted by the Korean people. The essence of monetary policy lies in effectively
managing the expectations of economic agents, and this is only achievable with the people's
belief in their central bank. I will devote myself to enhancing our Bank's policy effectiveness,
through efficient communication and consistent and predictable policy operations.
Third, I will devote close attention to preparing against potential risks and ensuring that our
economy maintains a stable recovery while sustaining price stability. In particular, I will
thoroughly monitor external risk factors, such as changes in the monetary policy stances of
major economies and the possibilities of resulting unrest in the global financial markets and
emerging market economies, and endeavor to come up with the necessary
countermeasures. In this process, I will work to ensure that we can achieve more effective
financial cooperation with major central banks and international financial organizations. We
also need to pool our wisdom for the stable management of household debt.
Dear members of the BOK family!
The last two years have afforded me a good opportunity to look at the Bank of Korea from a
more objective perspective. The outside evaluations of the Bank differ from what we
ourselves believe we are, and I think contain many points that we can refer to in conducting
our tasks. Here today, I would like to request the following:
We need to look back once again, and consider the appropriateness of our ways of thinking
and handling the work that we have taken as natural until now. All organizations tend to have
their own thoughts and patterns of behavior distinct from those of other organizations. From
the outsider's view, however, this can be seen as a kind of institutional self-centeredness that
tries to disregard changes in the environment. As I mentioned earlier, people's expectations
for the central bank are at this time higher than ever before . We should bear in mind that, if
we do not think outside the box, it can be difficult for us to play the role and carry out the
mission befitting the needs of our time.
Particularly, since the Bank of Korea is a national policy organization, we should always look
squarely at the problems which the Korean economy faces and maintain a positive attitude
while seeking the appropriate policy options. Only then will the Bank of Korea be able to be
recognized as working together with the people, and contributing to the development of the
national economy. To this end, I hope that all of you will devote yourselves to
selfimprovement, and to being top-class specialists in your areas of work.
I will devote myself to creating an environment in which all employees can trust and
communicate candidly with one another. We should never forget that a workplace culture
where seniors, juniors and coworkers trust, respect and care about one another is a very
valuable asset which our predecessors have cultivated for a long time.
Dear fellow members of the Bank of Korea!
I would like to briefly tell you my thoughts related to this organization and to its human
resource management.
I will completely reexamine the efficiency of our current management administration system
and operating procedures. I will work to further enhance the positive aspects of the various
reforms taken in the internal management area in the past years. If, however, there are
measures that have had adverse side-effects contrary to their original purposes, such as the
lowering of work efficiency, they will need to be improved on as soon as possible. And so I
will begin to work on this immediately. I will also examine carefully whether the current
organization of our bank allows us to commit ourselves to our natural duties including the
conduct of monetary policy, and devote myself to ensuring improvements in any areas
needing it.
Related to human resource management, as I have mentioned before the most important
criteria should be performance and reputation built up over a long period of time. I believe
that only these criteria will encourage us to further ourselves from a long-term perspective
and dedicate ourselves to the development of our bank. And while seeking the stability of our
organization based upon this principle, I will also pursue diversity and openness.
Dear fellow BOK staff,
The Bank of Korea is a public asset, which the people have entrusted to our care, and we
are therefore responsible for contributing to the development of our national economy. Let us
reconfirm our responsibility for committing ourselves only to our national economy and to the
people of Korea. I am confident that, by combining our outstanding 64-year tradition with the
flexibility of thought that the new environment requires, we can feel a strong motivation to
work with dignity and pride.
Thank you.