the imf, the sovereign debt problems of certain eu member states are likely to act as a factor making for market unrest for a considerable time to come. – if eurozone debt problems do worsen, there is the possibility that the credit risk of newly emerging market countries would also increase owing to a strengthened preference for safe haven assets. ( qe2 ) the global financial markets are likely to react extremely sensitively to the direction of the us fed ’ s monetary policy ahead of the expiry of the second quantitative easing at the end of next june. – market attention may well focus on whether or not there will be further quantitative easing ( qe3 ). 3 commodity markets international oil prices are forecast to maintain their upward trend in line with the continued recovery of the world economy and the increase in global liquidity. next year demand for crude is likely to surpass supply albeit only by a small margin, led by the emerging market countries ( + 500, 000bpd ). – the fact that the oecd countries ’ oil inventories are now at their highest level since 2005 will act as a factor limiting the scale of upward movement in the oil price. global liquidity, which has expanded greatly in line with qe2, could put upward pressure on oil prices if it feeds through into commodity markets. in the announcement of the federal reserve ’ s fomc for november, mention is made of the possibility of additional steps in accordance with future economic activity. 2. domestic conditions fiscal spending budgetary expenditures next year will be increased 6. 0 % over this year ( 260 trillion won ) to 276 trillion won while for the year 2012 there will be a 4. 0 % increase to 287 trillion won. the extent of the front - loading of fiscal spending during the first half of 2011 will be gradually scaled back so that around 2012 it will be back to its pre - crisis level. 4 the ratio of the fiscal deficit to gdp will decline from 1. 9 % this year to 1. 6 % in 2011 as tax revenues increase 5. the sovereign debt ratio will decline from 36. 1 % this year to 35. 1 % next year. for the years 2004 – 07, the front loading of expenditures during the first half averaged 53. 7 %. the government intends to achieve a balanced budget by 2013 or 2014. household consumption household purchasing power is forecast to expand thanks to higher incomes resulting from the continued economic upswing. households are also expected to become more consumption - minded.

wage system makes a real contribution to increasing youth employment. dear fellow members of the bank of korea, as you have always done until now, i would like to urge each of you to continue devoting your best efforts to carrying out the duties entrusted to you, imbued with a sense of mission as a central banker. if we all possess passionate but non - self - interested attitudes of public servants, we can make great contributions to overcoming the difficulties faced by the korean economy. in drawing my remarks to a close, i should like to express my gratitude to all of those participated in the preparation of this commemorative event, and wish you all and all of those whom you hold dear the very best of good health and the greatest of happiness. thank you. bis central bankers ’ speeches