a stable recovery trend. however, we should pay more attention to financial stability conditions as there are mounting concerns about a risk of buildup 4 / 9 of financial imbalances such as fund inflows to asset markets and private credit growth. the bank of korea should keep working to maintain financial and foreign exchange market stability. we should carefully monitor developments in domestic and global risk factors, including the possibility of a protraction of covid - 19 and subsequent delay in economic recovery, and implement market stabilization measures in a timely manner when necessary. we should also step up our examination of potential risk factors regarding financial stability. while closely monitoring and analyzing the buildup of household debt, the gap between the real economy and asset price movements, and the deterioration of the debt - servicing capacities of marginal firms and vulnerable households, we need to seek countermeasures in close cooperation with the government when any considerable changes are detected in the level of risk. the payment and settlement system environment is changing rapidly, due for instance to digital innovation and the growing entry of big tech. in response to these changes in the environment, we need to make more efforts to secure the safety of the payment and settlement systems, which have been within the inherently exclusive remit of the central bank. on the issue of central bank digital currency ( cbdc ), we need to establish a pilot system and carry out tests as planned in a virtual 5 / 9 environment, while actively reviewing ways to set up a fast payment system based on the real - time gross settlement system ( rtgs ). at the same time, we need to establish an institutional framework that more clearly defines our role and responsibilities related to the payment and settlement systems. looking back, economic crises were followed by significant changes in the role of the central bank. during the current coronavirus crisis, there have been growing calls to include employment stability as one of the legal mandates of the bank of korea. considering that employment stability supports sustainable growth and enhances quality of life of our citizens, the central bank should also take employment conditions into account as an important factor when operating monetary policy. however, having a number of possibly conflicting policy goals could make it difficult to maintain consistency in monetary policy operations, and therefore we will need to refer to research outcomes and past experiences at home and abroad, while listening carefully to experts, to come up with an optimal solution that fits the conditions we are facing. moreover, we need to seek ways to improve the monetary policy framework. it is well

juyeol lee : opening address – 2017 bank of korea international conference speech by mr juyeol lee, governor of the bank of korea, at the 2017 bank of korea international conference, seoul, 1 june 2017. * * * ladies and gentlemen, i am delighted to bid a warm welcome to you all, our participants in this bank of korea 2017 international conference. i wish to express my sincerest appreciation to our keynote speakers, professor thomas sargent of new york university and president john williams of the federal reserve bank of san francisco, as well as all of our moderators, presenters and discussants. special thanks to professor sargent also for his great help to us again this year in organizing the conference. it has been nearly a decade now since the global financial crisis. and looking back over these years, the global economy did not emerge from conditions of low growth and low inflation for a long time, even under the unprecedented accommodative fiscal and monetary policies carried out around the world. to make matters worse, financial imbalances increased, mainly in emes, as international capital flows into emes surged, against a backdrop of continuing low interest rates worldwide, and private debt levels in these countries soared. fortunately, the global economy seems to have regained some growth momentum, and the international financial markets are stable. however, trade protectionism and geopolitical risks are increasing in some parts of the world, and the normalization of monetary policy in the us is expected to continue. productivity growth has also not yet returned to its pre - crisis level. in view of all this, we cannot be sure that the current global economic recovery and financial stability will be sustained. and the structural problems that have built up since the pre - crisis period make it even more difficult to be confident. in this situation, i think we can take this year ’ s conference as a very meaningful opportunity to look into the challenges that lie ahead for us in the next decade, and to discuss ways of dealing with them. today, i would like to talk just a bit about some of the challenges that many countries face in common, and about possible policy responses to address them. first, income inequality has risen as an important global policy agenda. income gaps among the different social classes have been widening in many countries, and this could impair the virtuous circle by which economic growth leads to increases in employment and income, which then help growth to strengthen further. recently, globalization and technological innovation are being held responsible for