##economic policy. however, it is also true that there are considerable challenges lying ahead of our economy. looking first into the domestic economy, there are several structural factors weakening our growth potential. factors such as low fertility and population aging, labor market rigidity, inter - sectoral imbalances, and excessive regulation are reducing the dynamism of the economy, and there is concern as well that the competitiveness of some leading industries in korea may have weakened. it also cannot be stressed enough that the greatly increased household debt may constrain consumption and undermine financial stability. in terms of external conditions also, factors that can cause difficulties to the korean economy lurk everywhere. the possibility can also not be ruled out of economic growth in china continuing to slow, while the euro area and japan have yet to emerge from their economic sluggishness. in the international financial markets, heightened volatility of cross - border capital movements and price variables such as interest and exchange rates is expected due bis central bankers ’ speeches to changes in monetary policy in major countries such as a policy rate hike by the u. s. federal reserve. the recent plunge in international oil prices will obviously be a positive factor for the world economy, but concerns are emerging about possible adverse effects as well, such as the triggering of economic crises in oil - producing countries and a resultant possibility of international financial market unrest. against this backdrop, the top priorities for the korean economy this year are strengthening its economic fundamentals and boosting its growth potential through spurring structural reform of the overall economy. the korean government has chosen structural reform as its number one priority in mapping out this year ’ s economic policy directions. however, putting such words into action without setbacks is as important as the drawing up of appropriate plans. economic agents including firms, financial institutions and households need to realize that they can enjoy the fruits of growth for a long period of time only if they participate in structural reform and endure the resulting pains. dear fellow members of the bank of korea! i would like to touch now on the tasks that we will need to focus on this year. first of all, we should conduct our monetary policy in such a way as to support the recovery of economic growth on a foundation of price stability, while also paying attention to financial stability. looking ahead, as it is expected that inflation will remain low amid an only modest recovery of domestic economic activity for a considerable time, it is desirable for the bank to maintain its accommodative monetary

, it is difficult to say anymore at this juncture that we are preemptively adjusting the degree of accommodation, since inflation has now exceeded 5 percent, and major central banks are reacting to inflation by normalizing their monetary policy rapidly and aggressively. we need to conduct monetary policy with finesse so that we can make the most of our advantage as an early starter and not miss the right time to act. rate hikes may increase difficulties for vulnerable groups in the short term, but if we get the timing wrong and inflation broadens further, the damage would be even greater. particularly since there are high uncertainties surrounding growth and inflation, we should remain agile in the conduct of monetary policy and become increasingly flexible in how we deal with changing economic conditions. beyond monetary policy operations in the short term, we should not neglect to prepare for structural changes in our society. we should strengthen our analysis and come up with relevant responses in economic areas undergoing structural change, such as the acceleration of green and digital transition, the divide in international politics along with the reorganization of global supply chains, and population aging. also, there are numerous calls for the central bank to take social responsibility to mitigate economic polarization. against this backdrop, we should think about how to reflect these calls in our monetary policy operations. dear members of the bank of korea, with respect to the domestic and overseas economic outlooks and monetary policy operations i mentioned earlier, i will have many more opportunities to explain them in the future. therefore, as we commemorate our bank ’ s anniversary today, i would like to talk more about internal issues. when i was appointed as the governor of the bank of korea, i came across media reports saying there were increasing calls from bok members for improvements in organizational operations. no organization can expect healthy development without united 2 / 6 support from its members. therefore, i find addressing this issue to be just as important a task as formulating policy. two months have passed since my appointment, and i am now convinced that you yourselves are well aware of the causes and the direction to take to resolve them. first, i think these voices are coming from the concern that our long - standing organizational culture, despite the pride and affection we have for it, has now become an obstacle for individuals to properly display their outstanding competence. at the same time, i was very pleased to find that you had given a lot of thought to change and innovation, and had prepared various suggestions for improvement. based on these suggestions motivated by