Lee Chang-yong, Governor of the Bank of Korea, "Let's Create an Organizational Culture Where We Speak Freely Without Ranks"

Bank of Korea 72nd Anniversary Ceremony
Governor Lee Chang-yong Emphasizes Organizational Culture Innovation
Hints at Additional Base Rate Hike
"Raised First but No Longer Preemptive"

Lee Chang-yong, Governor of the Bank of Korea, is explaining the base interest rate hike at a press conference held at the Bank of Korea in Jung-gu, Seoul on the 26th. / Photo by Joint Press Corps

Lee Chang-yong, Governor of the Bank of Korea, said on the 10th at the 72nd anniversary ceremony of the Bank of Korea, "Let's create an organizational culture where we remove rank insignias and speak our minds." The intention is to completely reform the Bank of Korea's unique organizational culture, which is conservative and has a strong hierarchical order, to promote innovation. In particular, Governor Lee suggested that the Bank will take a more active stance on sensitive economic policy issues in the future, not just producing internal reports that no one reads, by saying, "Let's reflect on the pressure that the Bank of Korea must remain neutral."

In his 72nd anniversary speech, Governor Lee said, "Our organization has been criticized for low operational efficiency and insensitivity to change due to high partitions that block collaboration between departments and rigid hierarchical order," adding, "There is also an evaluation that we are passive in communication with the outside and too quiet. Now, we all agree that we must transform our 'vertical, inward-oriented organizational culture' into a 'horizontal, outward-oriented organizational culture.'"

Having worked at the International Monetary Fund (IMF) for eight years, Governor Lee emphasized the need to change the communication style among members to create an atmosphere where people of any rank can speak freely and engage in discussions. He said, "I will also take the lead in eliminating rigid hierarchy until the day when even a researcher can say to me at lunch, 'Governor, your last speech was disappointing.'"

Governor Lee pointed out that the ultimate consumers of the Bank of Korea's policy services are external economic agents and said, "Let's not produce only internal reports that outsiders cannot know about or seek, but instead adopt a 'customer mindset' centered on the demand side." He stated, "Let's reflect on whether we have avoided policy implications or proposing alternatives due to the pressure that the Bank must remain neutral," adding, "Only by analyzing what the demand side wants and proposing policy alternatives can we enhance our status as a national economic think tank."

At the same time, Governor Lee emphasized the need for work-life balance and employees' self-development. He said, "Quality of life and living must be balanced, and this requires satisfaction with salary and welfare levels as a prerequisite," adding, "Although there are practical constraints, as Governor, I will carefully examine even the smallest parts of what can be improved."

He continued, "Our young employees, who will live in the era of 100 years, cannot avoid planning for life after retirement from the Bank of Korea," and said, "It is necessary for the organization to be a stepping stone for individual development by supporting career management and strengthening expertise in a way that increases each person's market value, not just human capital that can be used only within the Bank."

Governor Lee pointed out that both higher and lower ranks must make efforts for such changes, saying, "In the era of information and communication technology, we need to reflect on whether we have made the 'convenient complaint' that the root of the problem is organizational culture while neglecting our own efforts."

Meanwhile, Governor Lee expressed a sense of crisis, stating that the Bank of Korea is facing another challenge amid the prolonged Ukraine crisis and expanding global inflationary pressures. He said, "The central bank's fundamental role as an inflation fighter is becoming important again," adding, "As the trade-off between inflation and growth increases, difficulties in monetary policy operations may intensify."

Governor Lee also hinted again at the possibility of additional base rate hikes. He said, "At this point, with consumer price inflation exceeding 5% and major central banks increasing the speed and intensity of normalization, it is difficult to say that we are proactively adjusting the degree of easing anymore," emphasizing, "Although rate hikes may increase difficulties for vulnerable groups in the short term, if we miss the timing and inflation spreads further, the damage could be greater."

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