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

- known that low interest rates and low inflation have been prolonged and the relationship between growth and inflation has weakened since the global financial crisis. in response to this changing environment, the fed has recently changed its 6 / 9 monetary policy strategy, focusing more on employment stability. while korea is experiencing structural changes not unlike those in major countries, our situation calls for more attention on financial stability. therefore, we need to examine the performance and limits of the current monetary policy framework, and review whether there is a more effective way of operating it tailored to our circumstances. dear members of the bank of korea! while we face growing difficulties in conducting policy amid rapid changes in the economic environment, the expectations of the general public toward the central bank have heightened. to meet these expectations and firmly establish our standing as a credible central bank, it is all the more important that we achieve noticeable performance in our duties and responsibilities. an organization can generate outcomes only when an individual staff member fully exercises his or her expertise. in particular, at times like these when there are high uncertainties, the abilities to precisely analyze economic phenomena and make insightful forecasts are needed more than ever before. 7 / 9 moreover, in order for the bank to continuously create value that contributes to the korean economy, it is fundamental that we have a healthy organizational culture in place. for this, we will need to eliminate inefficiency from our operating practices while achieving innovations across the entire management system, including recruitment & transfer and evaluation & remuneration. we have recently completed a third - party assessment of organizational health by listening to candid opinions from the staff. we will accept the results of the assessment in their entirety and take them as the starting point of our efforts to improve our organization. we will first push forward with short - term tasks, while pooling all of our wisdom to set up measures for restructuring the management system over the medium - to long - term horizon. 8 / 9 my fellow members of the bank of korea! last year was a time in which we devoted strenuous efforts to respond to the coronavirus crisis. this year will likely be another challenging year for our economy. we should remain hopeful and confident, while staying vigilant and faithfully fulfilling our roles and responsibilities. as we greet this new year, i want to wish you all the very best of health and good fortune. thank you. january 4, 2021 governor juyeol lee 9 / 9