long - term it is necessary to maintain the rate of growth in debt at no more than that in income. the payment and settlement environment is changing greatly now, as technologies such as big data, artificial intelligence and biometric authentication come to be adopted in the financial industry. 3 / 5 in these circumstances the bank of korea must devote special efforts to advancing the payment and settlement systems and heightening their safety. the work of constructing the next generation bok - wire, in order among other things to enhance financial institutions ’ convenience in making funds transfers, will have to be carried out with insights peering ahead 20 or 30 years into the future. we will in addition have to work harder to strengthen the resilience of the bok - wire businesses against cyber risks and natural disasters as well. fathoming the depth and the breadth of the changes taking place in the financial sphere due to the recent digital innovations is not easy. research on ways of applying distributed ledger technology to payment and settlement has been increasing rapidly, led by central banks in major countries and commercial banks. there is a possibility that cryptocurrency transactions, which are showing signs of overheating around the world, will work as risks to financial stability, and we will therefore also have to continue considering measures for dealing with those risks. we should also keep participating actively in the related discussions in international society and with the domestic ministries and institutions concerned, while steadily carrying out studies of the effects of digital innovation on financial stability and monetary policy, and of the possibility of digital currency issuance by the central bank. dear fellow members of the bank of korea! efforts are currently proliferating to eradicate corruption throughout our society as a whole, and to make it an upright one. we are confident that we have always put an emphasis on principles and fairness, and managed ourselves strictly, but a look at it from the lofty standpoint of the public, which is demanding high levels of morality and transparency of the central bank, may find there to be some areas in which we have fallen short. and therefore, in carrying out our duties, we will have to check again one more time to see whether there might not be practices that we engage in that can be judged as unreasonable, and if so make bold efforts to correct them. our policy conditions and our business environment are changing incessantly. in this situation, if our ways of thinking and patterns of behavior remain stuck in the past we will face difficulties in fulfilling all of the duties entrusted

to us. we have to constantly ask ourselves what the roles being demanded of the central bank are, right now in particular, what policy alternatives related to pending economic issues we can propose, and how we should communicate with economic agents about our monetary policy directions. meanwhile, if we carry out our duties passively, for the reason that predicting the directions and the timings of future changes is difficult, then it will be difficult to propose policy alternatives that will help our economy to develop. we will have to exert courage individually, and work with enterprising spirits like ’ first penguins ’, taking single steps at a time 4 / 5 forward and challenging the environment. but even if an organization ’ s members all devote their best efforts in their own individual spheres, unless they can overcome the ‘ silo effects ’ of focusing solely on their own or their own departments ’ performances it will be difficult for the organization as a whole to develop. we therefore have to work to increase staff communication − between superiors and subordinates, between co - workers, and between departments − and through a broadening of understandings fix into place a healthy organizational culture characterized by mutual respect and care for one other. i cannot stress enough that we will have to design an elaborate assessment and compensation framework, and operate it to ensure that our organizational and personnel system can well support the development of such a culture. my fellow bank of korea family members! at this time last january, we started our new year with a special determination compared to any other time, to overcome the many difficulties that we faced. our economy has fortunately been showing a steady trend of growth, so that we have been able escape certain worries that we initially had, but we cannot be complacent and let down our guards at any time. i ask that during this year as well all of us, as central bankers, go forward with self - esteem and a sense of mission and do our very best in fulfilling the duties entrusted to us. as we welcome this new year of the golden dog, i want to wish all of you here at the bank of korea, and your families, a year filled with health and happiness. thank you. january 2, 2018 governor juyeol lee 5 / 5