Attending Tomorrow's Monetary Policy Committee Meeting, Participating in Base Interest Rate Decision
Newly appointed Bank of Korea Monetary Policy Committee member Cho Yoon-je is delivering his inaugural speech at the appointment ceremony held on the morning of April 21 at the Bank of Korea headquarters in Jung-gu, Seoul. [Image source=Yonhap News]
[Asia Economy Reporter Eunbyeol Kim] Jo Yoon-je, a member of the Financial Monetary Policy Committee (FOMC) of the Bank of Korea who had been excluded from voting due to stock ownership, has finally sold all of his KOSDAQ stocks.
On the 15th, the Bank of Korea announced, "The FOMC has confirmed that Commissioner Jo has sold all the stocks he held." Accordingly, Commissioner Jo will be able to participate in the FOMC meeting scheduled for the 16th, where the base interest rate will be decided.
Commissioner Jo, who took office in April, attended the FOMC plenary session on May 28 but voluntarily requested recusal (exclusion from duty execution due to a special relationship with the matter) regarding his stock holdings, which the FOMC accepted. This was the first time a commissioner was absent from a meeting due to recusal.
Jo, a former ambassador to the United States, held stocks in eight companies before taking office. Around the time of his appointment in April, he sold five stocks including financial stocks such as BNK Financial Group and Kia Motors. However, he did not sell three KOSDAQ stocks?SGA, an information security solution company; Sollid, a wireless communication equipment company; and Seongwang, a water cargo company?and requested a job-relatedness review from the Ministry of Personnel Management. Since Commissioner Jo is a non-financial small and medium-sized enterprise owner, it appears he judged there was no job-relatedness and did not sell the stocks.
However, on the 23rd of last month, the Stock Blind Trust Review Committee of the Ministry of Personnel Management concluded that Jo’s remaining stocks were related to his duties and notified him accordingly. According to the Public Officials Ethics Act, once notified of job-relatedness, the stocks must be sold or placed in a blind trust within one month. A decisive factor in the judgment was that an affiliate of SGA, one of the stocks Jo held, has a contract with the Bank of Korea for a document storage statistics system.
With Jo selling all his stocks, attention is focused on what decisions the Bank of Korea’s FOMC will make. When Jo was absent from the meeting in May, the Bank of Korea’s FOMC lowered the base interest rate by 0.25 percentage points from 0.75% to 0.50%, the lowest level ever. Market experts expect the interest rate to remain unchanged at this meeting unless there are special circumstances.
Meanwhile, as of 10:45 a.m. on the same day, SGA’s stock price was down 0.17%, while Sollid (+1.78%) and Seongwang (+0.32%) stocks were rising.
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