juyeol lee : 71st anniversary of the bank of korea speech by mr juyeol lee, governor of the bank of korea, at the commemorating ceremony of the bank of korea's 71st anniversary, seoul, 11 june 2021. * * * dear fellow members of the bank of korea family! today marks the 71st anniversary of the bank of korea ’ s establishment. i wish to express my sincere gratitude to our predecessors who devoted themselves to the development of the bank of korea and our economy, and to the many people who have supported and encouraged the bank. i would like to say in addition how much i appreciate the efforts of all members of our staff, who are faithfully fulfilling the duties entrusted to them in their positions despite these difficult conditions caused by the prolonged covid - 19 pandemic. our economy has recently been showing a faster - than - expected recovery from the slump caused by the covid - 19 shock. recovery in face - to - face service industries is still slow and employment conditions for vulnerable groups are still difficult. however, exports are growing strongly and facilities investment is exhibiting a trend of robust recovery. consumption is also gradually emerging from its slump. the financial and foreign exchange markets have remained stable since the latter half of last year, after showing drastic volatility at the early phase of the covid - 19 outbreak. there are latent uncertainties associated with the pandemic, but our economy is forecast to show a more clearly marked recovery in the second half of this year. against a backdrop of stronger growth in major economies, our exports and investment are expected to remain robust and consumption to improve further. the rapid recoveries at home and abroad are greatly attributable to the active policy responses of governments and central banks around the world, and recently have been helped by the easing of restrictions on economic activity with expanding vaccinations. dear fellow members of the bank of korea! the unprecedentedly bold economic stimulus measures by the policy authorities of major economies including korea were a great help in overcoming a sudden crisis that hit without warning. they contributed significantly to mitigating instability in employment and income by preventing severe economic contraction. however, it is also true that, in this process, imbalances between sectors and groups have exacerbated. as economic agents display greater appetite for risk, asset prices have risen more rapidly relative to the real economy. as a result, asset inequality has widened, and private debt has increased greatly. recently, there

has also been growing concern over global inflation. therefore, going forward we should carefully conduct policy to sustain the trends of recovery in the economy and employment, while making efforts to prevent the build - up of these imbalances. while encouraging capital concentrated in asset markets to flow into more productive sectors, we should manage the leverage of economic agents at a stable level. moreover, the expansionary measures taken so far in response to the crisis must be appropriately adjusted in conjunction with improvements in financial and economic conditions. this is essential for the stable and sustainable growth of our economy. continuous policy efforts are also needed to prepare for the post - pandemic era. in line with the currents of the times of the global economy, such as the shift to an eco - friendly economy and the fourth industrial revolution, many countries are racing to take up dominant positions in relevant industries. in the near future, the great divide will appear between countries and industries that apprehend this changing tide as an opportunity to create new growth engines and take a new 1 / 3 bis central bankers'speeches leap forward, and those that do not. in order for our companies and furthermore, our economy to secure competitive advantages, reforms of the industrial structure and regulatory framework must be accelerated. most of all, we need to strive to create an environment where innovation capacity in the private sector can lead to enhanced productivity and employment opportunities. dear fellow members of the bank of korea! i would like to talk now about the some of the things that our bank has to focus on carrying out from the second half of this year. if our economy is expected to sustain a trend of robust recovery, we will need to, at the proper time, begin to normalize the current accommodative monetary policy in an orderly manner. the timing and speed of adjusting the degree of monetary accommodation must be determined while closely examining the developments of the pandemic, the solidity and sustainability of the economic recovery, and the risk of build - up of financial imbalances. in this process, we should of course fully communicate with economic agents in advance so that they can prepare for policy normalization without being heavily impacted. we should promote stability in the financial and fx markets. going forward, domestic and overseas financial markets could show higher volatility due to global inflation and changing expectations about the monetary policy of major economies. we should closely monitor factors causing market unrest and take timely measures to stabilize the markets if needed. the buildup of household debt has become