At an inauguration ceremony at the Bank of Korea in Jung-gu, Seoul, on the 21st, new Bank of Korea Governor Shin Hyun-song said, "As uncertainty in the paths of prices and growth has increased due to supply shocks from the Middle East war, we must pursue price stability and financial stability through a cautious and flexible currency policy."
Shin said the boundaries between banks and nonbanks and between domestic and overseas markets are breaking down, making it harder to respond to financial risks in the old ways, adding, "We will actively use prudential indicators and market price indicators to strengthen early-warning functions." He also said the scope of analysis should be expanded by improving access to information on the nonbank institutional sector and by including off-balance-sheet transactions and nontraditional financial products.
Shin emphasized that as the financial environment becomes more international and digital, the credibility of the won and the stability of payments and settlements must be safeguarded. He said, "In cooperation with the government, we will push to open the foreign exchange market 24 hours and build an offshore won settlement system to improve the accessibility and stability of foreign exchange transactions in line with international standards." He also said, "We will increase the use of Central Bank digital currency (CBDC) and deposits tokens and, through international cooperation, raise the status of the won in the digital payments and settlements environment."
Shin agreed with the economic structural reform emphasized by former Bank of Korea Governor Rhee Chang-yong. Shin said, "On the structural reform tasks of our economy, the Central Bank should also play an active role," adding, "I believe structural factors are an important part of currency policy operations."
Shin also said he would prepare measures to strengthen communication with the government and markets. He said, "We will pursue policy coordination with the government where needed," and "while strengthening two-way communication with the market, we will keep working on communication methods suited to our circumstances."
Born in Daegu in 1959, Shin graduated from Emanuel School in the United Kingdom and received a bachelor's in philosophy, politics and economics and a master's and Ph.D. in economics from Oxford University. He then served as a finance professor at the London School of Economics in the United Kingdom and an economics professor at Princeton University in the United States, and was a member of the Financial Advisory Roundtable at the Federal Reserve Bank of New York. During the Lee Myung-bak administration, he worked as the Blue House presidential adviser for international economy. Shin later spent 12 years as head of the Monetary and Economic Department at the Bank for International Settlements (BIS), known as the "bank for Central Banks."