Welcoming Remarks at the 2025 Bank of Korea Monetary Policy Conference
"We are pursuing institutional changes in monetary policy in three major directions... We will actively discuss future improvements."
Lee Changyong, Governor of the Bank of Korea, stated this in his welcoming remarks at the "2025 Bank of Korea Monetary Policy Conference" held at the Bank of Korea in Jung-gu, Seoul on December 15. He explained that since the COVID-19 pandemic, the Bank has pursued institutional changes related to monetary policy in terms of communication, policy tools, and financial stability.
Governor Lee said, "Since COVID-19, we have deeply considered how to effectively fulfill our mandates of price stability and financial stability in the process of operating monetary policy." He added, "In particular, we have examined what the optimal monetary policy tools are in a situation where there are significant trade-offs between policy variables and the digitalization of finance is advancing, as well as how to communicate monetary policy effectively amid high domestic and external uncertainties."
In this regard, Governor Lee explained that the Bank of Korea has pursued institutional changes related to monetary policy in three main directions. In terms of communication, the Bank has presented the views of Monetary Policy Board members on the policy rate over a three-month horizon, based on economic forecasts. Regarding policy tools, the Bank has supplementarily utilized the Bank Intermediated Lending Support Facility, which corresponds to the funding for lending programs of major economies. For financial stability, the Bank expanded the range of eligible securities for Bank of Korea loans to prepare for the possibility of large-scale deposit withdrawals, and starting next year, it plans to implement an emergency lending system that allows financial institutions to use their loan assets as collateral.
Governor Lee said, "Despite these achievements, it is also true that there are still tasks that need to be addressed to enhance policy effectiveness," adding, "I hope that the conference will feature active discussions not only on the evaluation of past institutional changes but also on future directions for improvement."
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