policy stance. in this process, given that economic uncertainties remain high we will need to continuously monitor changes in the situations of economic growth, financial stability and price movements. as i mentioned earlier, in order to secure the effectiveness and credibility of monetary policy it is essential that we implement our policies in a timely manner and send consistent policy signals by increasing our accuracy in economic forecasting. we should put greater efforts into improving our economic forecasting models and the procedures for outlook forecasting. we should in addition continuously work to improve our monthly monetary policy statement and biannual monetary policy report, so that they can be more effectively utilized as tools for communicating with the market. this year we have to set the inflation target that we will apply from the year after. to this end we need to seek an appropriate level of inflation supporting sustainable growth of the korean economy, based upon a comprehensive and systematic analysis of changes in the environment for inflation since the global financial crisis. we should find the most appropriate inflation target, and also thoroughly analyze the target ’ s application time horizon, tolerance range and target indicators. we will also need to devote our best efforts to securing financial stability, which has grown in its importance as a new central bank mandate. inasmuch as external risk factors spread to the domestic economy mainly through the financial and foreign exchange markets, we need to work to continuously monitor the international financial markets and take preemptive measures in response when signs of risk are detected. the recent surge in household debt could be a result reflecting the effects of the policies taken by the government and the bank of korea, but it is also a sign of the build - up of risk. we thus need to monitor the household debt - related risk more closely, and devote active efforts to mitigating it in cooperation with the government and the other authorities concerned. greater efforts will be made to strengthen financial system stability, by for example shortening the cycle for review of systemic risks in response to the rapid changes in our financial environment, and by establishing an oversight framework for fintech, which can affect the payment and settlement system considerably. for the successful implementation of structural reform, it is required of us that we conduct a serious study of the roles of the central bank and the policy tools that it can employ. since the global financial crisis, the policy operation targets and tools of major country central bis central bankers ’ speeches banks have changed dramatically, and in korea as well calls for redefining the role of the central bank are continuing.

truly matter, then our enthusiasm for it will naturally increase. my dear colleagues! this year will be a more difficult time than ever before. we have already successfully overcome great hardships in the past, however, such as the foreign exchange crisis of 1997 and the recent global financial crisis, and in doing so i am proud to say that the bank of korea played a substantial role. if on top of your superb capabilities and talent your work attitude is also newly strengthened, then there is no doubt that we will be able to contribute greatly to helping our korean economy overcome its current difficulties and take another step forward. in welcoming the new year, i wish all of you in our bank of korea family very abundant health and happiness. thank you. bis central bankers ’ speeches