there are many policy tasks to be pursued for our economy to overcome the shocks caused by the global financial crisis, and what is more, to maintain steady growth. first of all, efforts to build up a foundation for more robust domestic demand should be continued. the global economic outlook makes it difficult to expect a rapid recovery of korean exports for the time being. a worsening employment situation, moreover, may hinder the recovery of private consumption and, along with sluggish facilities investment, lower the growth potential. in this regard, it is important to promote a virtuous circle of employment and growth and to strengthen economic resilience against external shocks through making continued policy efforts to boost domestic demand and create jobs. as it seems that the economic crisis has passed its peak, corporate restructuring has to be speeded up. if the resolution of ailing companies is delayed, it will be difficult for the financial markets to return to normal at an early stage with concerns over credit risk left unsolved, while there is also the possibility that the external competitiveness of the korean economy may be reduced. the financial and foreign exchange markets presently seem fairly stable, but more efforts need to be devoted to keep them on a firm track. as part of such efforts, it is necessary to develop measures which reduce the possibilities of market unrest from the large - scale inand outflows of foreign capital, while lessening dependence on short - term external debt. even when the financial markets and real economic conditions recover from this crisis, there is a need to devise means of preventing financial institutions from becoming locked into excessive competition for asset growth. there should also be a keen awareness that the accommodative monetary and fiscal policies implemented to tackle this crisis could impose a burden on the economy in the medium - and long - term horizon. my dear colleagues, i would now like to talk about what the bank of korea should promote as its top priority in the second half of this year and beyond. the bank should conduct interest rate policy with a main emphasis on supporting the continuation of the recent improvement in the real economy and the financial markets. the bank will also pay close attention to the possibilities that a rise in international commodity prices may disrupt the low and stable trend of prices and that rapidly swelling short - term liquidity may cause instability in asset prices such as those of real estate. the bank also has to make constant efforts to strengthen the foundation for financial stability. there is a need to examine the desirable scope of the

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, 2 january 2015. * * * dear fellow members of the bank of korea! today is our first day of work in 2015, the year marking the 70th anniversary of national liberation. i would first like to express my sincere appreciation to all of you for so faithfully carrying out your duties under difficult circumstances. since returning last april to the bank of korea, where i had worked my entire career, i have devoted great efforts to fulfilling my heavy responsibilities as governor. and looking back i feel rewarded with some sense of achievement and satisfaction, but i also remember even more clearly that last year left much to be desired. since the time i took office as governor, i have thought that monetary policy communication with the market is very important, and i have endeavored to do this in a smooth manner. for effective communication, the accurate forecasts of economic conditions is required. this will enable us to send consistent policy signals and gain the confidence of economic agents. economic movements changed greatly last year, however, owing mainly to structural changes in the korean economy and to external and internal shocks, and so the results of our communication with the market were not so satisfactory. the fact that the effects of our monetary policy were unclear is also disappointing. although we strengthened our accommodative monetary policy stance further last year, by reducing the base rate on two occasions and raising the ceiling on the bank intermediated lending support facility, the trend of economic recovery was insufficient, with some even voicing concerns about deflation. as consumer price inflation was below the target range for a long period of time, controversy over the adequacy of our monetary policy stance continued. in a situation of low inflation resulting mainly from supply - side factors, such as declines in prices of international crude oil and domestic agricultural products, conducting monetary policy only to achieve the inflation target may not be desirable. i think it is disappointing that we did not get this message across properly to economic agents in our country. dear members of the bank of korea! it is generally forecast that economic conditions in korea will improve at least slightly more this year than last. the korean economy is expected to continue its modest trend of recovery going forward, on the back of improvements in the global economy centering around the us, the sharp declines in international oil prices, and the effects of expansionary macro