[2023 National Audit] Government Uses Bank of Korea Lump Sum for Tax Revenue... Lee Chang-yong "Parliament Should Set the Limit"

Kim Ju-young "Interest Amounting to 149.7 Billion Won"

Lee Chang-yong, Governor of the Bank of Korea, commented on the Bank of Korea's temporary borrowing system, stating, "There is a problem that it could become a policy if the government continuously borrows," and added, "It is an issue that the National Assembly should set a limit on."

Governor Lee made these remarks on the 23rd during the National Assembly's Planning and Finance Committee audit held at the Bank of Korea, in response to opposition lawmakers' criticism that "the government is covering the shortfall in tax revenue through the Bank of Korea's temporary borrowing."

Kim Ju-young, a member of the Democratic Party of Korea, stated, "The government borrowed 113.6 trillion won through the Bank of Korea's temporary loans up to September this year, which is the highest amount compared to the government's temporary borrowing scale over the past 10 years," and added, "The interest alone amounts to 149.7 billion won."

Lawmaker Kim criticized, "Although the government fully repaid the temporary loans at the end of September, considering the deteriorated revenue conditions, it is expected that borrowings will increase in the future," and said, "In an unprecedented tax revenue shortfall situation, emergency measures like the Bank of Korea's temporary loans have limitations in forming a safety net for our economy."

He continued, "In the United States, the Treasury is prohibited from borrowing directly from the central bank, the Federal Reserve (Fed)," and explained, "Funding is only allowed through open market operations, and the U.S. Treasury publishes the federal government's fiscal information monthly in the form of a Monthly Treasury Statement."

Lawmaker Kim pointed out, "On the other hand, in Korea, the amount of borrowings can only be confirmed belatedly through the previous year's annual report the following year," and emphasized, "We also need to clearly disclose this immediately, like the United States."

In response, Governor Lee said, "I think it is a desirable direction to make fiscal borrowing amounts transparent."

However, Governor Lee added, "To make it effective, it is a very difficult issue to define what it means that the borrowing should not become a policy, whether it refers to an average balance or something else," and said, "According to the National Assembly's resolution, up to 50 trillion won can be used as needed, so management is being done within the limit."

[Image source=Yonhap News]

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