Hong Nam-ki "Expanding Price and Financial Uncertainty... Thorough Preparation for White Swan"

Deputy Chairman Do Gyu-sang of the Financial Services Commission (from left), Lee Ju-yeol, Governor of the Bank of Korea, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, and Jung Eun-bo, Chairman of the Financial Supervisory Service, are attending the "Macroeconomic Financial Meeting" held at the Bankers' Hall in Jung-gu, Seoul on the morning of the 11th and posing for a commemorative photo. (Photo by Ministry of Economy and Finance)

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki met on the 11th with Lee Ju-yeol, Governor of the Bank of Korea, Jeong Eun-bo, Chairman of the Financial Supervisory Service, and Do Kyu-sang, Vice Chairman of the Financial Services Commission, to discuss measures for price stabilization and emphasized thorough preemptive preparations to prevent risks from expanding due to lack of coordination among fiscal, monetary, and financial authorities.

In his opening remarks at this year's first expanded macroeconomic and financial meeting held at the Seoul Banking Hall, Deputy Prime Minister Hong said, "Amid increasing domestic and international market volatility such as global inflation and changes in major countries' monetary policies, uncertainties in the economy, prices, and finance are expanding," adding, "Considering these uncertainties, the most important tasks in the first half of this year are maintaining resilience, stabilizing domestic prices, and managing economic risks."

The meeting discussed recent economic conditions and future responses, identification and management of major domestic and international risk factors, weakening of global supply chains, and responses to the Ukraine risk.

Deputy Prime Minister Hong explained, "We are exploring how to support small business owners facing financial difficulties amid recent liquidity management trends, how to respond to the process of alleviating accumulated financial imbalances and the latent risks therein," and "in particular, the Bank of Korea recently took a simple purchase measure of government bonds worth 2 trillion won to stabilize the government bond market, and we will also discuss future responses to stabilize the bond market."

External risks such as the recent slowdown in the global economic recovery, high oil prices, global inflation, normalization of major countries' monetary policies, US-China G2 conflicts, and geopolitical risks related to Ukraine were also on the agenda. Deputy Prime Minister Hong pointed out, "Domestically, there is a possibility that negative impacts from increased volatility in interest rates, exchange rates, capital inflows and outflows, and adjustments in asset markets will expand, focusing on vulnerable sectors such as household debt, self-employed individuals, and the secondary financial sector."

In particular, Deputy Prime Minister Hong emphasized, "Based on past experience, although these are predictable risks, it is a crucial time for thorough preemptive preparation and management to ensure that they do not become so-called White Swans due to failure to prepare appropriate countermeasures."

Deputy Prime Minister Hong and others shared the government's ongoing measures to strengthen supply chain linkages and sought additional response directions, as well as discussed the ripple effects on South Korea's real economy and financial markets should the Ukraine situation worsen.

Deputy Prime Minister Hong also explained that cooperation from the private financial sector is essential to support small business owners. He said, "Last year, the profits of the private financial sector are expected to reach an all-time high," and added, "If possible, we hope the financial sector will voluntarily take the lead in proactive win-win cooperation to alleviate even a little of the financial difficulties faced by small business owners."

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