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BOK chief reiterates need for central bank's enhanced role

Published: 16 Jul. 2025, 16:52

Bank of Korea (BOK) Governor Rhee Chang-yong speaks during a press briefing at the BOK headquarters in Jung District, central Seoul on July 10. [JOINT PRESS CORPS]

Korea should enhance its legal and institutional framework in a manner that strengthens the Bank of Korea's (BOK) role in macroprudential policy decisions, the central bank chief said on Wednesday.

BOK Gov. Rhee Chang-yong made the remarks in a keynote address at a Seoul conference jointly hosted by the Asia Development Bank and the Journal of International Money and Finance.

"Unlike other major economies, the BOK does not have direct macro prudential policy tools, nor does it have the authority to supervise the micro-economy," Rhee said.

"This could prevent swift and effective policy responses when the government and the bank disagree on policy directions or their intensity," he added.

Rhee's remarks align with the BOK's call to expand the central bank's role beyond merely setting the country's base rate, stating that it has no policy tools other than interest rates to respond to financial uncertainties in advance.

The BOK is said to have submitted a proposal to the government, stating it should take some of the regulatory authority of the Financial Services Commission and have the right to inspect banks and other financial institutions.

Yonhap