as they were significantly affected by political events, and, even though we were expecting rapid us monetary policy tightening and a strong dollar well in advance, the change in the dot plots in the september fomc meeting was more than we expected. on top of that, the fact that two major central banks in japan and china are the two exceptional cases of loose monetary policies made our currency depreciate much more than expected in september before it started to stabilize recently. 1 / 2 bis - central bankers'speeches more recently, prices and our exchange rate have somewhat stabilized and the speed of us interest rate hikes is expected to be less rapid as indicated by the recent press conference by chairman powell. ensuring price stability and reducing inflation through tight monetary policy are still our priority. at the same time, as the recent interest rate increase has been fast by any historical standard in korea, there are growing signs of stress in various sectors, and maintaining financial stability, especially in non - banking financial sectors, is becoming an important issue. in fact, we are seeing signs of money move from non - banking sectors to the banking sector after deposit rates in banks significantly increased following policy rate hikes. how to recycle those flows back to non - banking sectors is an important policy issue for the bok to manage financial market stability in this period of high inflation and tight monetary policy. now, back to long - term challenges facing the korean economy. among many challenges, the risk of economic and geopolitical fragmentation stands out to me the most. in fact, it is a short term challenge, too. the escalating us - china tensions and further deterioration of the russia - ukraine war are likey to lead to financial and trade fragmentation and consequently, the contraction of global growth and trade. it will be structural headwind limiting long run growth of the korean economy, which is heavily dependent on exports. in this respect, global cooperation at the economic and political levels is more urgently needed than ever. countries responsible for global leadership, among others, need to promote collaboration and cooperative competition, since the weakening of trade and global growth stemming from fragmentation can have negative impacts on all countries. in retrospect, china's rapid growth over the last two decades allowed the korean economy to delay painful restructuring, while reaping the benefits of trade expansion with china. we no longer have that luxury. korea cannot any more avoid restructuring reforms, even though painful, in diversifying its supply chains and concentration of key industries

in the gip, helping to establish networks between their banks and the bank of korea, and the number of foreign central bank applicants for the program has been on the rise. every year we also have around 10 bok staff members taking part in the training programs of international institutions and foreign central banks. in sum, i think that staff with great potential are provided with opportunities to display their potential freely, and that we have seen positive results from this. intangible assets, which are necessary in order for the bank of korea to become a leading advanced central bank, are being accumulated almost without our noticing it. i believe these are proud and inspiring achievements, that have produced considerable changes in a short period of time. dear fellow bok members, at international meetings i have often raised the new issue that an era of central bank competition is on the horizon. i believe that this is a natural outcome of the increased impacts of central banks on their national economies in line with the changes characteristic of our times. although there were opinions raised at first that the concept of competition applied to central banks seemed somewhat awkward, since the central bank is the only such institution in its country, this is in fact a valid concept since there are a number of different central banks in the global economy as a whole. and as i have stressed to you at every opportunity, bis central bankers ’ speeches the bank of korea ’ s contribution to korean economic development must not be smaller than those made by the us federal reserve, the bank of england and the people ’ s bank of china to their own respective economies. by now we should have the capabilities to comprehend other central banks ’ activities, and to establish and implement policies tailored to our own national economic conditions as well. performing such varied functions could be compared to facing a situation in which we sometimes need to aim at a moving target. and in this environment, it cannot be said that we are performing an appropriate role if we simply follow theories or practices established under other economic conditions. we should instead be developing our abilities to create alternatives befitting our own national economy. fostering the potential to understand what has gone wrong is just as important as the effort to find the answer to a problem. we are living in an era in which people equipped with critical minds and the capacities to uncover new tasks are urgently needed. if we consider our future by putting together the things i have just said, the global financial crisis facing us now will be ultimately overcome by strengthening the dynamic characteristics of our economy and