Departing BOK Monetary Policy Committee Member: "Need to Explore New Monetary Policy Tools"

Farewell Address of the Bank of Korea Monetary Policy Committee Member

[Image source=Yonhap News]

[Asia Economy Reporter Eunbyeol Kim] As the economic impact of the novel coronavirus infection (COVID-19) grows and central banks worldwide engage in 'money printing,' three members of the Financial Monetary Policy Committee of the Bank of Korea retired on the 20th as their terms expired.

Committee member Dongcheol Jo expressed in his farewell remarks, "I am grateful for the honor of sitting in the locomotive of the massive train called the Korean economy alongside my fellow committee members over the past four years," adding, "We must remember that the authority of a central bank is not granted by anyone but is earned through intellectual leadership grounded in scientific thinking and policy implementation based on it."

He continued, "We need to consider whether the Bank of Korea's reputation as an 'inflation fighter,' built over the past half-century, has perhaps become a legacy that now needs to be overcome," and stated, "While the power to issue currency must never be abused, failing to use it appropriately when necessary can also cause significant social losses."

He further added, "Taking these points into balanced consideration, I hope that the Korean economy, driven proactively by the Bank of Korea, will be a comfortable train that neither experiences sudden stops nor sudden accelerations, and that there will be no public concern about it heading toward deflation."

Committee member Inseok Shin pointed out, "Unlike in the past, a new theory of central banking is now needed, and it is necessary to explore new monetary policy tools and methods beyond the traditional means previously used." He argued that new tools and methods are required especially because the global economic environment will change significantly after the COVID-19 crisis.

He said, "Although the shock of COVID-19 lowering growth rates may be short-term and growth rates might rise in the future, it is expected that the economic environment will undergo medium- to long-term changes in many areas such as production, growth rate, employment, and prices," adding, "Considering these points, a central bank role suited to the changed environment after the COVID crisis will be necessary, and I hope the Bank of Korea will contemplate this aspect going forward."

Meanwhile, committee member Ilhyung Lee stated, "I have already spoken several times during Financial Monetary Policy Committee meetings about the situation facing the Korean economy and the remaining challenges," and added, "I believe it is appropriate to leave quietly without words when departing, so I have no special remarks to leave behind."

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