[Gwanga in] The Returning New Deputy Governor of BOK, Eyes on the Monetary Policy Committee

"With the rapidly increasing household debt emerging as the main topic at this month's Monetary Policy Committee meeting, the role of the former Bank of Korea monetary policy committee member from the Korea Housing Finance Corporation is gaining importance."

"Yoo Sang-dae, the newly appointed Deputy Governor known for his hearty laughter, is Yoonited, Sangquick in responding to situations, and has Daeamic interpersonal skills (an acrostic poem based on his name), which has led many inside the Bank of Korea to welcome his return."

The Bank of Korea is abuzz following the appointment of Yoo Sang-dae, Vice President of the Korea Housing Finance Corporation, as the new Deputy Governor. While the Governor oversees external affairs, the Deputy Governor is responsible for personnel, budget, and organizational management within the Bank, making this appointment the most anticipated personnel matter for the second half of the year. The Deputy Governor also serves ex officio as a member of the Monetary Policy Committee, which is set to decide the base interest rate on the 24th, drawing attention to the next committee member. Although the current Deputy Governor Lee Seung-heon’s term has about ten days left, the early announcement of the new Deputy Governor was necessary to allow time to prepare for this month’s Monetary Policy Committee meeting.

It is also notable that Yoo was working at the Korea Housing Finance Corporation just before his appointment. The KHFC is the implementing agency for the Special Booming Housing Loan, a policy mortgage product that temporarily combines the Safe Conversion Loan and Qualified Loan for one year under government policy. The Special Booming Housing Loan has seen applications exceeding 31 trillion won so far and has been identified as one of the main causes of the surge in household debt. Although the KHFC does not formulate or execute policy, it directly witnesses the Special Booming Housing Loan at the frontline, which may enable it to convey the intense field atmosphere and sentiments regarding household debt directly or indirectly to the Monetary Policy Committee.

According to the financial sector, as of the 10th, the outstanding household loans of the five major banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) totaled 679.8893 trillion won, an increase of 668.5 billion won compared to the end of last month. During the same period, mortgage loans surged by 1.2299 trillion won. The increase in household loans across the entire banking and financial sectors is likely to continue for five consecutive months from April through August.

Yoo’s appointment is also attracting attention as the return of an old boy (OB). Born in 1963, Yoo graduated from Jemulpo High School and Seoul National University’s Department of Economics before earning a Ph.D. in Economics from the State University of New York. He and Governor Lee Chang-yong are alumni of Seoul National University’s Economics Department, with Governor Lee from the class of ’80 and Yoo from ’82. After joining the Bank of Korea in 1986, Yoo spent a significant period in the International Department and is regarded as an expert in international finance and cooperation. As Director of the International Cooperation Department, he led the signing of currency swap agreements with Canada and Switzerland and oversaw the Korea-US currency swap during the COVID-19 outbreak. A Bank of Korea official said, "He has long served in the International Department and also led the bond market team in the Financial Market Department, giving him a high level of understanding of market conditions," adding, "His ability to detect turning points in the market is a strength."

Three years ago, Yoo was a strong candidate for Deputy Governor but moved to the Korea Housing Finance Corporation after the surprise appointment of the current Deputy Governor Lee Seung-heon. However, his return to his original home at the Bank of Korea has led to evaluations within government circles that he is a "true winner" with experience both inside and outside the Bank. There is also speculation that Yoo’s appointment over the formidable candidate former Deputy Governor Lee Hwan-seok was partly influenced by his being from Seoul National University’s class of ’82. Although from a different department, notable figures from the same class, such as Choi Sang-mok, Presidential Office Economic Secretary, and Won Hee-ryong, Minister of Land, Infrastructure and Transport, hold key positions in the Yoon Suk-yeol administration.

A Bank of Korea official said, "With growing concerns over household debt, the future coordination with Governor Lee will be crucial."

Yoo Sang-dae, New Deputy Governor of the Bank of Korea

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