A bill aimed at reducing the government's influence on the Bank of Korea's budget to enable independent interest rate decisions has been introduced for the first time in the 22nd National Assembly.
According to the National Assembly Legislative Information System on the 15th, Han Byung-do, a member of the Democratic Party of Korea, last month took the lead in proposing a revision to the Bank of Korea Act to increase the autonomy in determining the Bank of Korea's personnel expenses and welfare costs.
The bill focuses on narrowing the scope of salary-related expenses requiring prior approval from the Minister of Strategy and Finance to only those related to the salaries of the Monetary Policy Committee members.
Instead, to ensure transparency in the Bank of Korea's budget process, it requires submission to the relevant standing committee of the National Assembly, rather than the government, at least 30 days before the start of the fiscal year.
Under the current law, the Bank of Korea's budget for each fiscal year is finalized through a resolution by the Monetary Policy Committee, but the salary-related expense budget (personnel expenses and salary-related welfare costs) must obtain prior approval from the Minister of Strategy and Finance.
However, concerns have been raised that the government's prior approval authority over the Bank of Korea's salary-related expense budget undermines the neutrality of monetary and credit policy.
Previously, Representative Han proposed the same bill once during the 21st National Assembly, but it failed to pass the review stage of the relevant standing committee.
During the 21st National Assembly, a total of 26 amendments to the Bank of Korea Act were proposed over four years. However, all were automatically discarded without being submitted to the plenary session.
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