due to the tightening of mortgage lending regulations including dti ratios, however, house prices show a slower pace of increase this year ; with the greater seoul area turning to a mild decrease. in contrast to their very steep falls from pre - crisis levels in countries such as the usa and the uk, house prices in korea have remained relatively unaffected. from january 2008 up until the present, house prices fell by 20. 8 % in the usa and 7. 0 % in the uk whereas they edged up 5. 5 % in korea. 3. policy responses thanks to the active implementation of monetary and fiscal policies, the korean economy could overcome the financial crisis faster than other major countries. monetary policy in the immediate aftermath of the collapse of lehman brothers, the bank of korea moved boldly from that october to bring stability to the foreign exchange market and ease the credit squeeze. it supplied a total of 26. 8 billion us dollars in foreign currency liquidity by making active use of the foreign exchange reserves and a currency swap facility with the us fed. through open market operations and support for a bank recapitalization fund and so on, it also pumped in korean won liquidity of 28 trillion won, amounting to the equivalent of around 2. 6 % of nominal gdp. in a further move, between october 2008 and february 2009, it cut its policy rate dramatically from 5. 25 % to its lowest - ever level of 2 %. from the second quarter of 2009, in line with the stirrings of improvement in finance and the economy, it progressively withdrew the liquidity supplied in the course of tackling the financial crisis. during 2009, it collected in full the foreign currency liquidity provided through swaps and loans. similarly last year, it recouped the entire amount of the liquidity pumped in by way of rps. in june this year the aggregate credit ceiling for the financial support of smes was reduced by 1. 5 trillion won, part of the 3. 5 trillion won increase undertaken in response to the crisis. → right now the total scale of the korean won liquidity supplied and still outstanding amounts to only 6. 9 trillion won ( 0. 6 % of nominal gdp ), being made up of part of the increases in the aggregate credit ceiling ( 2. 0 trillion won ), the bank recapitalization fund ( 3. 1 trillion won ) and the bond market stabilization fund ( 1. 8 trillion won ). the bank of korea adjusted its policy rate upward from 2

major country central banks and international consultative bodies, while participating actively as well in the discussions on financial stability at the g - 20, the financial stability board ( fsb ), the basel committee on banking supervision ( bcbs ) and other international forums. we must in particular exert our utmost energies to successfully host the g - 20 meeting of ministers of finance and central bank governors and the bis meeting of central bank governors, both scheduled for november this year. continuous efforts on our part are also needed to enhance the safety and efficiency of the nation ’ s payment and settlement system. the bank should strengthen risk management in the net settlement systems, in line with the expanded use of the retail settlement system and diversification of its participant institutions. the “ plan to develop the payment and settlement systems in the securities markets ”, prepared jointly with other related institutions including the korea exchange and the korea securities depository, must also be seamlessly put into operation. in our management of the foreign reserves, meanwhile, even greater attention should be paid to their safety and liquidity, in consideration of the still high degree of uncertainty in the global financial markets. efforts are at the same time needed to secure their improved profitability, in line with the rise in our holdings of foreign currency assets. every endeavor should be made to ensure the trouble - free supply of banknotes and coins, and to prevent circulation of counterfeits. special attention needs to be given as well to augmenting the quality of public economic education. my dear colleagues, given today ’ s rapid global economic integration and the fast - paced changes in economic structures and in economic agents ’ behavior, it is very difficult for a central bank to implement monetary policy looking ahead at medium - to long - term economic conditions. in order to overcome such changes and challenges, it is thus more important than ever that we develop our abilities to analyze and forecast the economic situation accurately and to make timely and effective policy decisions under conditions of great uncertainty. the bank ’ s organizational and personnel management should therefore be rearranged, to meet such needs of the times by reinforcing our research and policy operation capacities. nor should our increasingly more important operations in the areas of financial stability and international cooperation ever be neglected. while economic conditions are still difficult, growing social attention is being paid these days to improving public sector management. we must continue our efforts to boost the efficiency of our organizational management. my dear colleagues, this year we will celebrate the 60th anniversary of the founding of the bank