Lee Ju-yeol "Potential Risks Will Fully Emerge This Year... We Must Stay Vigilant"

Ijuyeol, Governor of the Bank of Korea
2021 New Year's Address at the Pan-Financial Industry New Year's Meeting

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eunbyeol] On the 5th, Lee Ju-yeol, Governor of the Bank of Korea, said, "Due to liquidity supply by policy authorities and the financial sector, as well as interest repayment deferral measures, latent risks are expected to fully emerge this year," and urged the financial sector to "maintain a high level of vigilance."

In his New Year's address at the '2021 Pan-Financial New Year's Meeting,' Governor Lee stated, "2021 is a year when the financial sector's crisis management capabilities will be truly tested and a historic turning point entering the post-COVID-19 era." He added, "This is a time when the resolve of the 'Great Reset' to reset everything to create a better future is necessary."

He noted that since domestic and international economic uncertainties remain high, support for households and businesses should continue, but the efficiency of resource allocation must be gradually improved. Last year, during the early spread of the novel coronavirus infection (COVID-19), policy authorities supplied unprecedented levels of liquidity and extended loan maturities, leading to accumulated debt; this year, risks arising from this may surface.

Governor Lee said, "Especially in situations where debt levels are high and the gap between finance and the real economy has widened, even a small shock can greatly shake the market," and emphasized, "We need to examine the vulnerable parts of the financial system more carefully." He pointed out that there are many issues to resolve, including not only the debt problems left as aftereffects of the COVID-19 crisis but also the concentration of funds into asset markets such as real estate and stocks.

He advised that a longer-term perspective is necessary to actively prepare for changes in the financial industry accelerated by COVID-19. Governor Lee said, "We must devote all efforts to preparing for the transition to the digital and untact era through innovative finance."

Additionally, Governor Lee expressed gratitude, saying, "The reason our economy was able to somewhat mitigate the shock of COVID-19 even during an unprecedented infectious disease crisis was because the financial system played a buffering role," and added, "Thank you to the financial professionals who actively participated in supporting small business owners and SMEs and calming market anxiety."

Meanwhile, the Pan-Financial New Year's Meeting, held annually at the beginning of the year, was not held this year considering the government's strengthened social distancing measures. However, New Year's addresses from Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki, Financial Services Commission Chairman Eun Sung-soo, Bank of Korea Governor Lee Ju-yeol, and Financial Supervisory Service Governor Yoon Seok-heon were made available to financial professionals.

This content was produced with the assistance of AI translation services.