"If an SVB Crisis Occurs in Korea, Deposit Withdrawal Speed Will Be 100 Times Faster Than in the US"

Lee Chang-yong, Governor of the Bank of Korea, Bloomberg Interview

Lee Chang-yong, Governor of the Bank of Korea, is holding a press conference on April's Monetary Policy Committee interest rate decision at the Bank of Korea in Jung-gu, Seoul on the 11th.
[Image source=Yonhap News]

Lee Chang-yong, Governor of the Bank of Korea, said that if a turmoil similar to the Silicon Valley Bank (SVB) incident occurs in Korea, the speed of deposit withdrawals would be 100 times faster than in the United States. However, he explained that the impact of the SVB incident on Korea is currently limited.

Governor Lee made these remarks during an interview with Bloomberg on the 13th (local time) in Washington DC, saying, "This turmoil has given us many tasks to address."

He explained, "Korean youth are much more accustomed to digital banking, and the speed of deposit withdrawals is faster. If a similar incident to the SVB case occurs in Korea, deposits would be withdrawn 100 times faster than in the U.S. We need to prepare for this."

He added, "In the past, banks could close and return deposits within a few days, but now, with the development of social media, deposits must be returned not in days but within a few hours," and said, "How the Bank of Korea will respond together with supervisory authorities is a new challenge."

However, Governor Lee added that the impact of the SVB incident on Korea is minimal. When asked about the effect of global financial instability on Korea, he said, "Sudden risks worldwide can affect Korea as well, but so far, it has been fine."

When asked, "The Bank of Korea is maintaining the base interest rate at a very high level; when might this stance change?" he replied, "It depends on the data."

He said, "We expect the consumer price inflation rate to fall to the 3% range by the end of the year. If we become confident that the outlook is proceeding as expected, we will consider changing our (tightening) stance, but it is still too early to be certain."

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