the bank of korea new year speech january 2, 2017 juyeol lee governor the bank of korea dear fellow members of the bank of korea, today is our first day of work in 2017, and i would like to begin by expressing my sincere appreciation to all of you, for so faithfully carrying out your duties last year. at the opening ceremony for each new year, we always resolve to show renewed spirits of determination, but this year i think even more extraordinary resolutions are called for than in the past. looking back on the past year, a series of unexpected shocks at home and abroad caused our economy great difficulties. at the beginning of the year factors such as economic unrest in china, the further decline in international oil prices and uncertainties as to the timing of the policy rate hike by the us federal reserve kept us awake. after that the brexit vote in the uk, the presidential election in the us and political uncertainties at home arose as additional destabilizing factors. as a result of this series of events, our financial and foreign exchange markets were hit by high volatilities, and economic sentiments weakened sharply. against this backdrop, in order to support the recovery of our economy ’ s growth the bank of korea eased its monetary policy stance further. in march of last year we raised the total ceiling of the bank intermediated lending support facility greatly, and in june we cut the base rate to 1. 25 % per annum. moreover, while closely monitoring the financial and foreign exchange markets at home and abroad, we worked actively to stabilize the markets whenever factors causing instability arose. - 1 - despite these efforts, however, our country ‘ s economic growth still fell short of its potential last year. consumer price inflation also remained considerably below the target. the trend of high growth in household lending continued as our accommodative policy stance became prolonged, and concerns grew about the possibility of household debt causing a contraction in consumption and undermining financial stability. dear members of the bank of korea, this year our economy is expected to maintain its modest growth, thanks to the strengthening somewhat of the global economic recovery. if we look around, however, at conditions here at home as well as abroad, there are potential risk factors lurking everywhere that could limit the pace of growth. first of all, as the movements toward strengthened protectionism in major countries become more evident, it is possible that world trade could contract. uncertainties concerning the policy directions of the new us administration, the rate

the cd rate, we aim to enhance the effectiveness of the transmission channels of monetary policy and contribute to the facilitation of the related derivatives market ( financial services commission, 2024 ). fourth, after the svb failure, we have decided to pursue plans to expand the range of eligible collateral for bank of korea loans to include loans receivable in order to reinforce liquidity backstops ( bank of korea, 2023a ). we should continue our efforts to establish an institutional infrastructure that ensures a systematic and predictable liquidity support system for both banks and non - bank depository institutions. if necessary, we will also consider revising the bank of korea act in consultation with relevant agencies. we also need to be proactive in responding to the accelerating digital transformation. first, we will carry out a cbdc pilot test to establish a new financial infrastructure for the future where various private digital currencies, including a wholesale cbdc and tokenized deposits based on it, can be issued and distributed ( bank of korea, 2023b ). in addition, the bank of korea will actively participate in project agora ¡, a global financial infrastructure research project jointly launched by the bis and seven leading central banks ( bank for international settlements, bis, 2024 ). as a non - reserve currency nation, this will be a great opportunity for korea to participate from the outset in setting new standards for cross - border payment and settlement systems, positioning ourselves as an early rule - setter. also, public and financial institutions have faced difficulties in utilizing new technologies, such as cloud services and ai, due to the network separation between their intranet and the internet. cooperating with other related institutions, such as the national intelligence service and the presidential committee on the digital platform 2 / 5 bis - central bankers'speeches government, the bank of korea will be the first organization to take part in a pilot program to improve network security protocols in the public sector. i hope this initiative will enable our staff to work anytime and anywhere they want, thereby increasing it efficiency and work productivity at the bank of korea, while also raising awareness of the importance of cybersecurity. dear fellow bank of korea colleagues, when we look further ahead, what we need to do doesn't stop here. facing numerous structural problems that have accumulated and deepened over time, such as a low birth rate & an aging population, regional imbalances & overconcentration in the capital region, pension depletion & old