The People Power Party introduced a bill requiring the Bank of Korea to immediately submit to the National Assembly an analysis of the main causes and impacts when there is a significant change in currency credit policy and the macro financial stability situation.
On the 29th, according to the National Assembly and others, lawmaker Kim Mi-ae of the People Power Party led the introduction of a "Partial Amendment to the Bank of Korea Act" containing these provisions. The amendment has undergone an official review by the National Assembly Legislative Office and will take effect six months after promulgation. It is to apply starting with the currency credit policy evaluation report prepared after implementation.
The current Bank of Korea Act requires the Bank of Korea to submit to the National Assembly, at least twice a year, an evaluation report on the implementation of currency credit policy and the macro financial stability situation. However, amid recent market stress, including sharp exchange rate swings, critics have said there is a lack of institutional mechanisms for the National Assembly to promptly identify the causes and spillover effects of currency and financial changes.
According to the amendment, ▲ the core items that must be included in the currency credit policy evaluation report are clearly stipulated by law, and ▲ if major indicators related to currency and finance change rapidly, the Bank of Korea must promptly submit to the National Assembly a report containing an analysis of the causes and the impact on the national economy.
The evaluation report includes changes in liquidity indicators, operation of policy tools such as the base rate, domestic and external economic and financial conditions, and financial stability risk factors such as household debt and imbalances in the asset market. However, items that could have a significant impact on financial markets may be submitted confidentially, balancing market stability with the National Assembly's oversight function.
Kim Mi-ae said, "This amendment is intended to institutionally supplement the National Assembly's access to information and oversight of the Bank of Korea's policy operations, creating a foundation for preemptively responding to currency and financial risks."