juyeol lee : new year speech new year ’ s address by mr juyeol lee, governor of the bank of korea, at the bank of korea, seoul, 4 january 2016. * * * dear fellow members of the bank of korea, today is the first day of work in 2016, which we greet with new hopes and resolutions. i wish you and your families a happy new year full of good health and blessings. let me also express my sincere appreciation to all of you for faithfully carrying out your duties last year. looking back, we have of course never had any easy years, but last year the korean economy went through many truly great difficulties. on top of the continuous slump from the beginning of last year in exports, which have led economic growth, we also witnessed a rapid contraction in consumption due to the unexpected outbreak of mers. financial and foreign exchange market volatilities increased greatly as well, driven by the uncertainties concerning the timing of the us federal reserve ’ s policy rate hike and by the economic unrest in emerging market economies ( emes ) including china. against this backdrop the bank of korea eased its monetary policy further, by cutting the base rate on two more occasions following the cuts in 2014, and by raising the total ceiling of its bank intermediated lending support facility to a large extent. we also worked actively to stabilize the markets, by strengthening our monitoring of financial and foreign exchange markets at home and abroad and by making efforts to prevent any excessive expansion in the volatility of price variables. however, our economic conditions were not satisfactory, as economic growth fell short of its potential and inflation remained below the target range. the recent low growth and low inflation are worldwide trends, and are attributable largely to factors not easily dealt with through monetary policy such as sluggishness in global demand, declines in international oil prices and changes in economic structures. the bank of korea, which has the mandate of pursuing macroeconomic stability while paying attention to financial stability, had to be alert to the possibility of its accommodative policy stance pursued over a long period of time causing other adverse effects via the accumulation of financial imbalances. nevertheless, we have to also look humbly back, and ask whether there was any room for improvement in terms of our assessments of economic conditions, our policy responses, and our communication efforts. dear members of the bank of korea, this year our economy is expected to maintain a modest trend of growth, thanks to

reduced, we need to devote more efforts to strengthening our communication with the market. bis central bankers ’ speeches we need to pay greater attention to financial stability this year. first, we should seek measures to ensure a soft - landing of the household debt problem, by cooperating closely with the government and the regulatory authorities. liquidity and fund flows through open market operations should be properly managed, to prevent companies from suffering having financing difficulties in the processes of restructuring. since it is likely that the high volatility in our financial and fx markets will continue this year, we have to thoroughly monitor international financial market conditions and capital flow trends, and if necessary implement our comprehensive contingency plan to ensure market stability, in a timely manner. meanwhile, as it and finance become integrated, fintech, big data and the uses of blockchain technology are becoming global trends. in line with this, we need to carefully examine how these changes will affect our policy environment, and in particular the stability of our payment and financial systems. we also need to conduct an in - depth study of how internet - only banks, whose launch is scheduled for this year, will evolve in the future, and what changes they will bring to the monetary policy transmission channels and bank management environment. dear fellow members of the bank of korea, as our economy remains in a difficult situation, and the economic and social environments change rapidly, there have been diverse and sometimes conflicting demands from various areas of society regarding the central bank ’ s role. in this situation, in order for the bank of korea to meet the nation ’ s expectations and fulfill the role entrusted to it, we need to make ground - breaking improvements in our ways of perceiving reality and carrying out our duties, as well as in our methods of policy operation. people tend to remain complacent in keeping to what they are used to and comfortable with, and it is thus very difficult to break from old mind - sets and practices. i am well aware that our bank of korea staff members have made enormous efforts to adapt to the changing external environment. however, there does remain much room for improvement still, and so we need to strengthen our dynamism for change. this can of course not be done in a day. we have to work continuously to improve the relevant systems for increasing our recruitment of external talent and promoting efficiency and competition in our personnel management. our society demands of us that we have much higher levels of integrity and stronger senses of vocation than is