Shin Hyun-song: "Supplementary Budget to Raise Economic Growth Rate by 0.2%p... Disposing of Foreign Assets and Domestic Stocks" (Comprehensive)

Submitted Written Responses to National Assembly’s Strategy and Finance Committee
“Mechanically Prioritizing Price Stability Is Not Desirable”
“Supports Introduction of KRW Stablecoin, Banks Should Lead Consortium”
“Disposing of Significant Foreign Assets... Listing Two of Three Residential Properties for Sale”

Shin Hyun-song, nominee for the Governor of the Bank of Korea, projected that this year’s supplementary budget will raise the economic growth rate by 0.2 percentage points, ahead of his confirmation hearing scheduled for April 15. He repeatedly emphasized that it is not desirable to mechanically prioritize price stability, and that both economic growth and financial stability must be considered, thus showing a less ‘hawkish’ (preference for monetary tightening) stance compared to market expectations. Amid controversy over his holdings in foreign currency assets, domestic exchange-traded funds (ETFs), and multiple residential properties, he also stated that he would dispose of a significant portion of his assets, citing a ‘sense of responsibility as a public official’.

According to written responses submitted to the National Assembly’s Strategy and Finance Committee ahead of Shin’s confirmation hearing on April 13, Shin stated, “With the recent Middle East war simultaneously increasing upward pressure on prices and downward pressure on growth, and further aggravating difficulties in vulnerable sectors, the supplementary budget will help mitigate the shock. Analysis using the Bank of Korea’s model estimates that this supplementary budget will raise this year’s growth rate by about 0.2 percentage points.”

Regarding the expansion of central banks’ roles in major countries from a focus on price stability to also include financial stability and macroprudential management after the global financial crisis, Shin noted, “While the importance of central banks’ role in price stability has been highlighted again after the pandemic and the high-inflation period, financial stability remains crucial given the close link between the financial sector and the real economy.”

Shin added, “Through the 2011 amendment to the Bank of Korea Act, financial stability was established as a core mandate of the Bank of Korea, and the financial stability function was strengthened. Moving forward, I believe we must further enhance our role in analyzing and strengthening the soundness of the financial system, while implementing monetary policy with attention to financial stability.”

"Monetary and Credit Policy Should Consider Not Only Prices but Also Economic Trends... Timely Response if Middle East Situation Worsens"

Hyun-Song Shin, candidate for Governor of the Bank of Korea, is responding to reporters' questions as he arrives at the confirmation hearing preparation office set up at Hanwha Financial Plaza in Jung-gu, Seoul, on March 31, 2026. Photo by Dongju Yoon

When asked about the direction of future monetary and credit policy, Shin responded that he would take a comprehensive approach, considering not only prices but the overall flow of the economy. He said, “As stipulated in the Bank of Korea Act, it is desirable to prioritize price stability but also to manage policy while balancing considerations of financial stability and growth. Because price stability, growth, and financial stability are closely interconnected, mechanically prioritizing only price stability is not appropriate.”

He continued, “Since the Middle East conflict, volatility in financial and foreign exchange markets has increased, with both upward risks to prices and downward risks to growth rising, and the trade-offs among policy variables becoming more pronounced. There is also considerable uncertainty surrounding the progress of negotiations between the US and Iran and the resulting movements in international oil prices. Accordingly, future monetary policy should carefully and flexibly be decided, closely monitoring developments in the Middle East and their impact on the domestic economy.”

Shin also emphasized that if the Middle East situation deteriorates again, volatility in financial markets may increase, and institutions and authorities must be prepared to respond. “Although the exchange rate has declined and stock prices have largely recovered their previous correction since the ceasefire, if the Middle East situation worsens again, volatility in financial markets could increase once more. Therefore, financial institutions should strengthen liquidity risk management, and policy authorities should respond in a timely manner with market stabilization measures if necessary,” he said.

Asked whether he still holds the same view as in his 2012 joint research paper for the Bank of Korea, which proposed establishing a foreign exchange stabilization agency to enhance the crisis response capacity of Korea’s financial system, Shin replied, “At this point, establishing such an agency is not appropriate. Structural vulnerabilities have been greatly improved due to foreign exchange soundness policies, such as regulation of forward position limits, which have suppressed short-term external debt and improved maturity structures.”

"Supports Introduction of KRW Stablecoin... Maintaining Trust in Currency Is Most Important"

Shin stated that he basically supports the introduction of a Korean won stablecoin but stressed that maintaining trust in the currency is most important. His view is consistent with the Bank of Korea's existing position that a consortium centered around banks should be formed, with non-bank institutions participating. “Stablecoins can have a positive impact, such as serving as a means of transaction for tokenized assets and supporting programmable functions, so they will have a role in the future monetary ecosystem,” Shin said, adding, “They can coexist with deposit tokens in a complementary and competitive manner.”

Regarding issuers, Shin noted that unlike the United States and Europe, Korea is not a key currency country, so compliance with regulations such as customer verification and anti-money laundering is particularly important. “Given this, it is desirable to initially allow issuance through a consortium centered on banks with proven regulatory compliance capabilities, with non-bank institutions participating, and then gradually expand,” he stated.

On claims that using stablecoins can enhance the efficiency of foreign exchange transactions, Shin said, “It is unclear whether blockchain can sufficiently comply with capital and foreign exchange regulations, or whether the efficiency of foreign exchange transactions would be improved if regulatory compliance costs rise.” Regarding virtual assets in general, including stablecoins, he maintained a cautious stance, noting, “Virtual assets do not fulfill the core functions of money—unit of account, medium of exchange, and store of value. Therefore, I believe virtual assets have fundamental limitations in replacing existing legal tender.”

Shin Hyun-song Addresses 'Asset Controversy': "Disposing of a Significant Portion of Foreign Assets... Selling Domestic Stocks and Listing Two of Three Residential Properties for Sale"

Shin Hyun-song, nominee for the governor of the Bank of Korea, is responding to reporters' questions as he arrives at the hearing preparation office set up at Hanwha Financial Plaza in Jung-gu, Seoul on March 31, 2026. Photo by Yoon Dong-joo

Addressing criticism that a significant portion of his financial assets are denominated in foreign currencies, which may be inappropriate for a central bank governor, Shin said, “I have already disposed of a considerable amount of foreign currency-denominated financial assets and plan to further reduce the proportion of foreign assets. I feel a sense of responsibility as a public official and will act in a manner that meets the public’s expectations.”

Shin reported that, among the 8.24102 billion won in assets owned by himself, his spouse, and his eldest son, 5.547472 billion won—or 55.5%—is comprised of overseas financial assets and real estate. There have been concerns that, as the value of the won rises, the won-denominated valuation of these assets increases, raising the potential for conflicts of interest for the head of the foreign exchange authority.

He also said he plans to sell his domestic stocks. Shin has previously reported holding 1.05396 billion won worth of the ‘Franklin FTSE Korea UCITS ETF,’ a Korea equity exchange-traded fund listed on the London Stock Exchange. In response to suspicions that he purchased this ETF just before being nominated as governor, Shin clarified, “It is unrelated to the timing of my nomination. I have been buying it as part of portfolio management, given the strong performance of the Korean stock market compared to other countries.”

Regarding the controversy over multiple home ownership, Shin said, “As a public official nominee, I feel a sense of responsibility, and I have put two of the three residential properties I own up for sale.” Shin personally owns an apartment in Gangnam-gu, Seoul valued at 1.509 billion won (84.92㎡), jointly owns an officetel in Jongno-gu with his spouse valued at 1.8 billion won (198.108㎡), and his spouse owns an apartment in Illinois, United States valued at 284.94 million won.

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