New Governor Shin Hyun Song's Inaugural Message: "In Times of Great Transformation, the Bank of Korea Must Evolve... Seeking Answers Through Action"

Inauguration as the 28th Governor of the Bank of Korea... Term Until April 20, 2030

"With Shifting Economic Conditions, the Bank Must Also Evolve" — Emphasis on Action Preceding Theory

Commitment to Enhancing Effectiveness of Monetary Policy

"We are living through a period of great transformation, driven by geopolitical conflicts and a technological revolution in artificial intelligence (AI). I will seek answers through practical action and help write new theories."

This was the first message from Hyun Song Shin, the newly appointed Governor of the Bank of Korea, upon taking office. At his inauguration ceremony held on April 21 at the Bank of Korea's annex in Jung-gu, Seoul, Governor Shin emphasized the need to "reconsider the role of central banks in this era of great transformation" and highlighted the importance of "seeking answers through practice, ahead of theory." On this occasion, he made clear his determination to enhance the effectiveness of monetary policy and strengthen the early warning system for financial stability. He also identified the internationalization of the won and expanding the Bank's role in structural reform as key priorities going forward.

Hyun-Song Shin, the newly appointed Governor of the Bank of Korea, is arriving at the Bank of Korea in Jung-gu, Seoul on the 21st.

"Central banks must evolve too... Focus on internationalization of the won and other key priorities"

Governor Shin reflected on history, stating, "Looking back, the history of central banks has been a process of constant evolution in response to changes in the economic environment." He explained that in the 17th century, the early deposit banks—the forerunners of modern central banks—played a central role in building trust in money by issuing trustworthy deposits and facilitating settlements amid the proliferation of metallic currencies. Through the Great Depression of the early 20th century and the stagflation of the 1970s, central banks established themselves as the cornerstone of macroeconomic management, maintaining stability in prices and growth. Governor Shin stressed, "The evolution of central banks was not the consequence of established theory, but rather a process in which experience led to new theories." He added, "The challenges we face today likewise require us to find solutions through practical action and write new theories."

As key priorities for the next four years, he outlined ▲enhancing the effectiveness of monetary policy ▲strengthening the early warning system for financial stability ▲internationalization of the won ▲expanding the Bank's role in structural reform. He stated, "As uncertainty over prices and growth trajectories has increased due to supply shocks from the Middle East conflict, we must pursue price and financial stability through prudent and flexible monetary policy." He added, "To improve the effectiveness of monetary policy, we will re-examine our policy tools and coordinate with the government as needed."

He also signaled changes in the approach to financial stability. Governor Shin said, "As the boundaries between banks and non-banks, and between domestic and overseas sectors, are rapidly eroding, we will actively utilize movements in market price indicators along with existing soundness indicators to strengthen our early warning system." In particular, he emphasized the need to improve information accessibility in the non-bank sector and expand the scope of analysis to include off-balance-sheet transactions and non-traditional financial products of financial institutions.

Hyun Song Shin, the new Governor of the Bank of Korea, is arriving at the Bank of Korea in Jung-gu, Seoul on the 21st.

Digital Financial Innovation Must Not Undermine Stability... Discussion on Macroprudential Framework

Governor Shin, an expert in monetary trust and payment settlement stability, reiterated the importance of these issues. He stated, "To promote the internationalization of the won, we will work with the government to establish 24-hour foreign exchange trading and build an offshore won settlement system, improving accessibility and stability in foreign exchange transactions to meet international standards." He expressed his ambition to elevate the global status of the won by facilitating capital and real transactions based on the Korean currency.

Regarding digital financial innovation, he pledged to enhance the usability of central bank digital currency (CBDC) and deposit tokens through the second phase of 'Project Han-gang,' and to raise the global profile of the won in digital payments through international cooperation initiatives such as the 'Project Agora.' He remarked, "We will work with the government to ensure that the internationalization of the won, payment and settlement innovation, and the macroprudential framework form a 'three-pronged approach' to create synergy."

He also called for a proactive role for the Bank of Korea in reforming the economic structure. Governor Shin noted that demographic changes, deepening inequality, and issues in the real estate market and household debt are weakening growth engines. "Structural factors are not separate from monetary policy, but rather an important part of its operation, so we will continue in-depth research and policy recommendations on these matters," he said.

Hyun-Song Shin, the new Governor of the Bank of Korea, is greeting as he arrives at the Bank of Korea in Jung-gu, Seoul, on the 21st.

Hyun Song Shin, a Macroeconomic and Financial Expert... Seamless Transition to Governor

Governor Shin, now the 28th Governor of the Bank of Korea, will serve until April 20, 2030. The National Assembly's Strategy and Finance Committee held a confirmation hearing on April 15 and adopted the report on the confirmation hearing the previous day. On the same day, President Lee Jaemyung approved his appointment, allowing the new Governor to take office without any vacancy following the departure of his predecessor, Lee Changyong. Governor Shin said, "The confirmation process was not smooth, and I sincerely apologize to the public for any concerns caused. There is much to be done, and I will be judged by my performance as Governor of the Bank of Korea going forward."

Governor Shin is a macroeconomics and finance expert who has served as a professor at Oxford University, the London School of Economics, and Princeton University in the United States, an advisor to the Bank of England, a resident scholar at the International Monetary Fund (IMF), and a member of the New York Federal Reserve Bank's Financial Advisory Committee. Since 2014, he has been Director of Research (Chief Economist), Economic Adviser, and Head of Monetary and Economic Department at the Bank for International Settlements (BIS). He will serve as Governor of the Bank of Korea for the next four years.

Meanwhile, the BIS, where Governor Shin worked for 12 years until just before his inauguration, also congratulated him on his appointment. Pablo Hernandez de Cos, Secretary General of the BIS, said, "Governor Shin, as a member of the Executive Committee and a core member of the BIS, provided intellectual leadership and strategic direction, advancing the BIS's research and analysis activities in support of central banks. I sincerely congratulate Governor Shin on his appointment as Governor of the Bank of Korea."

Shin Hyun-sung, the newly appointed Governor of the Bank of Korea, is arriving at the Bank of Korea in Jung-gu, Seoul on the 21st and responding to questions from reporters.

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