, to mop up a crisis without paying due consideration to the massive social costs that it causes. it follows that central banks should pursue both price stability and financial stability in a balanced and harmonized way to promote macroeconomic soundness. the central bank must make full use of its expertise in evaluating macro financial risks as well. and when necessary, it should work to counter these risks jointly with the government and the financial supervisory authorities. as a next step, from a global perspective, we need to work to enhance policy effectiveness through collective policy actions involving governments and central banks around the world. the world economy has become highly integrated, and the complexity and inter - connectivity of economic and financial phenomena have greatly increased. it has therefore become tremendously difficult for any one central bank alone to either prevent a crisis or deal with its aftermath. in this light, the recent crisis has triggered a realization among policy - makers worldwide of just how important policy cooperation is between the government, the central bank and the financial supervisory authorities. and the building - up of networks to support this cooperation is of course equally important. as i am sure you are aware, the construction of global financial safety nets was adopted as an agenda for the seoul g20 summit as a korean initiative. this may be seen as one prominent example of a collective policy action, having the characteristic of the supply of global public goods. lastly, i would point out the need for identifying exactly what influence monetary policy will have in the transformed economic and financial environment following the crisis. this crisis has had a devastating impact on the balance sheets of households, corporations and financial institutions, not to mention the government ’ s fiscal position. the experience of the crisis and the tightening of global financial regulations will also cause vast shifts in economic agents ’ behavior. furthermore, the changes in global macroeconomic conditions after the us federal reserve ’ s recent additional quantitative easing are looming as new challenges for central banks ’ monetary policy. in order to cope with this new world economic regime, we will need to devise necessary countermeasures to deal with the possible changes in the monetary policy transmission channels and the limitation on policy effectiveness. particularly, given that changes are always and everywhere accompanied by uncertainty, we should endeavor even more strongly to heighten the predictability and credibility of our monetary policy. closing remarks fellow central bankers, i hope this seminar provides an opportunity for constructive discussions on how the central bank contributes to economic and financial stability within the macroprudential policy framework. it will also be good

juyeol lee : new year speech new year ’ s address by mr juyeol lee, governor of the bank of korea, at the bank of korea, seoul, 2 january, 2018 * * * dear fellow members of the bank of korea! today we start our first tasks of 2018, filled with new hope and resolve. i would like to begin by expressing my heartfelt gratitude to all of you, for so faithfully carrying out your duties throughout the last year even in the midst of difficult conditions. last year the trend of growth in our economy picked up gradually, even despite the worsening of our trade conditions vis - a - vis major countries and the increase in north korea risks, as our exports and facilities investment showed buoyancy in line with the global economic recovery. this improvement can also be said to have owed in large part to the bank of korea ’ s accommodative monetary policy to this time. with regard to consumer price inflation, the upward pressures on the demand side were not large last year, but under the influence of supply - side factors including the rising international oil prices, the annual rate of inflation was around our target level of 2 %. given the forecast that the economy would continue to grow at its potential rate going forward as well, and that inflation would approach the target level, conditions were also built up under which the degree of monetary policy accommodation could be adjusted. judging that holding the base rate at the current level under these circumstances could lead to a further expansion in the real degree of accommodation which could entail an increased risk of financial imbalances accumulating, the monetary policy board raised the base rate by 25 basis points last november. the bank of korea, while devoting efforts to maintaining market stability whenever factors causing financial or foreign exchange market unrest arose, at the same time also endeavored last year to expand its bilateral currency swap agreements with foreign central banks so as to strengthen the multi - layered global financial safety nets. the extensions of its currency swap agreements with the reserve bank of australia and the peoples ’ bank of china, and the establishment of a new standing currency swap agreement with canada, a vehicle currency country, can be considered particularly valuable achievements reaped directly by the bank itself last year. dear members of the bank of korea! this year the korean economy appears likely to maintain its trend of solid growth, thanks for 1 / 5 example to a continuation of the global economic recovery and to the government ’ s expansion of its fiscal expenditures