, including the build - up of leverage which can be triggered by monetary policy, by using macroprudential policy instruments which reduce the interconnectedness of financial institutions and procyclicality through regulations on financial institutions ’ balance sheets. furthermore, if additional macroprudential policies which can contribute to financial stability successfully play a complementary role to monetary policy, this can contribute to enhancing the monetary policy ’ s credibility and transparency. in order to achieve financial stability through the harmonization of operations between the two policies, it is essential for the various policy authorities to cooperate closely. and there is a global trend toward emphasizing the central bank ’ s role in setting up an institutional framework to ensure seamless cooperation. policy decisions should be made through this institutional framework based on adequate sharing and analysis of information to avoid overlap and conflict between policy goals. in the process, the role of the central bank is important particularly since it is in charge of monetary policy and forms the mainstay of macroprudential policy implementation. while carrying out monetary policy so far, central banks have been equipping themselves as systemic regulators to take the lead in implementing macroprudential policies by building up expertise in evaluating overall economic conditions and financial market stability based on their process and analysis of macro and financial data. the us fsoc ( financial stability oversight council ), europe ’ s esrb ( european systemic risk board ), the uk fpc ( financial policy committee ) set up to carry out macroprudential policies since the crisis show that the central bank plays a leading role within the financial stability policy agencies. bis central bankers ’ speeches conclusion almost five years have now gone by since the global financial crisis and we have faced two major assignments of overcoming the crisis successfully and subsequently preventing a recurrence of the crisis. on the one hand, major advanced countries are implementing quantitative easing to overcome the crisis, and on the other hand international financial bodies such as g20, fsb and bcbs are developing global financial regulatory reform measures and promoting their implementation. coordinating these measures designed to overcome the crisis and prevent its recurrence is one of the major challenges the international community now faces. along with this, international policy cooperation to curb regulatory arbitrage, as well as each individual country ’ s coordinated operation of its macroeconomic policies, is crucial for the sustainable and stable growth of the world economy. there has been of course a constant repetition of financial and economic crises, most prominently the great depression of the 1930s, and

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