minute information on the financial markets not only to carry out monetary policy but also to perform its function as the lender of last resort. though stripped of the banking supervisory function, the bok has been given the statutory right to request managerial information from banks and to ask the fss to examine banks with it on a joint basis. it can also ask the fss to examine banks on specific areas of concern to the central bank. in actual practice, though, the bok has had considerable difficulty in gathering information. banks often took a negative attitude toward the bok ’ s demand for managerial information. moreover, the bok has no right to demand information from non - bank financial institutions. under these circumstances, the bok has prevailed upon the fss to provide it with materials such as the reports filed by financial institutions. this january, the bok, the fss, and the kdic agreed a memorandum of understanding providing for a dramatic increase in information sharing among them. this means that the central bank is now able to collect managerial information both from banks and non - bank financial institutions. another area of concern was the on - site examinations to check banks ’ managerial status. in its early days, the fss was reluctant to accept the bok ’ s requests for bank examination, even though it was legally stipulated that the fss should accept the bok ’ s demands for bank examination. in 2002, the fss went so far as to turn down the bok ’ s demand for a joint examination. this clash spurred the two organizations to draw up a memorandum of understanding in october 2002 after a hard negotiation. under it, the fss must accept the bok ’ s demand for joint examination provided the mpc decides this necessary. the arrangements, nonetheless, suffer from the limitation that the bank has no option but to stick to the fss ’ s examination schedule. it is still impossible for the bok to hold an on - site examination when it judges this warranted. it was a big issue whether to give the bok the power of independent examination, even at the time of reforming the financial supervisory system in 1997. on that occasion, the bok took the position that it should be free to examine banks at its own discretion. the national assembly, however, accepted the government ’ s argument that if the bok examined banks independently of the fss, the burden on the financial institutions might be too heavy and that joint examinations should be held with the bok joining in

are to maintain financial stability, we have to consolidate our efforts to build up a framework of cooperation and an appropriate division of roles between the authorities involved. these include the central bank, the finance ministry and the financial supervisory agencies. secondly, information asymmetry is one of the major factors working to increase financial instability so we must strengthen our efforts to heighten the transparency of the accounting and management information of financial institutions. lastly, financial market players tend strongly toward herd behaviour, which fosters the accumulation of risk factors and the spread of crises. in order to calm this galloping herd, the policy authorities should provide appropriate information on market conditions, so that players can decide upon the level of risk they wish to accept from a long - term and system - wide perspective. concluding remarks so far, i've briefly dealt with our experience of financial crises and the importance of macro - and micro - prudential surveillance, together with the tasks ahead. i am sure that this conference will provide a great opportunity to build up an effective framework for financial stability. thank you for listening so attentively.