external communication. our research work resulting from rigorous analysis and discussions should not just be locked away in a drawer. we should provide precise analyses and supporting data in greater volume, and further diversify our communication channels. we need to increase communication with experts from the government and other relevant agencies as well. with respect to communicating with the government, i am well aware that concerns have been raised about central bank independence. however, i do not think the mere act of communicating would undermine our independence. rather, we are at a time that calls for constructive dialogue with the government, the market and the private sector to solve the challenges of our day. in doing so, we should take a comprehensive look into the issues, and together seek consistent and coordinated solutions. lastly, we should clear the hurdle confining our thoughts to be complacent within our domestic borders. at present, the international community is changing by the day amid the transition to a digital and eco - friendly economy. our major companies have already acted swiftly to become global market leaders and highly competitive exporters. this gets me to reflect deeply about whether the public sector is doing its part. we should check whether we have not been missing out on the major trends of change in the international community, having focused narrowly on domestic issues. for the bank of korea, as with other central banks, global issues such as the digital economy and green finance have become matters of 4 / 6 concern. in the case of cbdcs, the consequent changes in the environment have major impacts on the public payment and settlement infrastructure and the effectiveness of monetary policy. we therefore need to treat these as existential issues for our bank and prepare thoroughly. i do not mean to say that we should only learn from our peers abroad. we are already in a position to share our own experiences and research and to place our stamp on the global agenda. i look forward to seeing our highly competent staff actively engaging in the international community, further elevating our status globally. fellow members of the bank of korea, i will be there with you when overcoming all three of these hurdles. let ’ s work to further consolidate the bank of korea ’ s reputation as not only the guardian of monetary and credit policy but also the nation ’ s bona fide top think tank best informed on our economy. let ’ s work to become an intellectual leader that contributes to policymaking by the government and municipalities and that also supports decision - making by the private sector, while faithfully carrying

seong - tae lee : global stagflation threat and monetary policy opening address by mr seong - tae lee, governor and chairman of the bank of korea, at the 16th central banking seminar, seoul, 21 october 2008. * * * opening remarks ladies and gentlemen, let me extend a hearty welcome to all central bankers gathered here from around the world to take part in the bank of korea ’ s “ central banking seminar ”. i would like to express my special thanks as well to our keynote speaker, professor dr. hermann remsperger of the executive board of the deutsche bundesbank. this seminar, now in its sixteenth year, is held to promote exchanges of experience and opinion among the staff of central banks of various countries. we hope as well that it will lead to a consensus among us on major monetary policy issues. at the present time, countries around the world face a very grave situation. economic slowdown and inflation are occurring simultaneously and the worldwide financial turmoil is worsening. in this context the theme of this week's seminar, the " global stagflation threat and monetary policy " merits deep interest and close attention of all central banks. global economy facing triple whammy after enjoying a long period of prosperity under low inflation, the global economy is now experiencing acute difficulties in the three areas of economic activity, prices and finance. the global economy is shrinking fast, led downward by the advanced economies, due to the combined shock of persistently high oil prices and the us subprime mortgage meltdown. emerging economies, too, which had for some time seemingly decoupled from the advanced ones, are now also showing signs of slowdown. what is more, inflation rates around the world continue to run at high levels due to the knockon effects of the sharp rises in prices of international commodities including oil and grains. in the midst of all this, counterparty risks are emerging starkly in the international financial markets and the volatility of price variables such as share prices and exchange rates has grown greatly. a severe credit crunch has thus erupted in response to credit risk reappraisal and the ongoing deleveraging by financial institutions. in consequence, emerging countries now face difficulties in securing foreign currency liquidity, as they are perceived to have relatively higher credit risk. central bank policy tasks ladies and gentlemen, when a cost shock occurs, such as a steep rise in oil prices, it is widely acknowledged that the central bank ’ s policy options are constrained