Economist faces Korea’s own ‘wobbly bridge’ moment

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Economist faces Korea’s own ‘wobbly bridge’ moment

Published: 13 Apr. 2026, 00:04

Audio report: written by reporters, read by AI

Cho Hyun-suk

The author is the economy news editor of the JoongAng Ilbo.

On June 10, 2000, the Millennium Bridge opened across the River Thames in London. Built over two years at a cost of 18.2 million pounds ($22.7 million), the pedestrian bridge was meant to mark the new millennium. It later appeared in the film “Harry Potter and the Half-Blood Prince” (2009), where it collapses under attack. The scene, while fictional, reflects a real vulnerability in the bridge’s early history.

Pedestrians cross the Millennium Footbridge across the River Thames in London on March 17, 2020. [AFP/YONHAP]

Just two days after opening, the bridge was closed due to severe swaying. Despite being supported by high-strength steel cables capable of bearing thousands of tons, the structure began to move when large crowds gathered. At first, the cause was unclear, prompting a major investigation.

Engineers soon found the explanation. Like many suspension bridges, the Millennium Bridge was designed to allow slight movement to absorb external forces. On its opening weekend, more than 160,000 people crossed it. Small lateral movements appeared. Pedestrians then began, unconsciously, to adjust their steps to the rhythm of the swaying.

As more people synchronized their movements, the effect intensified. The bridge eventually swayed up to 20 centimeters from side to side. Fear spread that it might collapse. Public complaints followed, leading to a prolonged closure, design modifications and reinforcement. The phenomenon, later identified as synchronous lateral excitation, had not been anticipated.

Five years later, the Millennium Bridge case resurfaced at the annual Jackson Hole symposium in Wyoming. The gathering brings together central bank governors and economists to discuss global economic issues. At the 2005 meeting, two relatively young economists took the stage.

Their presentations drew significant attention. They warned that a financial system tied together by complex derivatives could collapse in a chain reaction, triggering a widespread economic crisis. At the time, global markets were stable and expanding. Ben Bernanke, then chair of the Federal Reserve, described the period as the “Great Moderation.” Against that backdrop, their warnings were considered unconventional and drew strong criticism from established economists.

One of the speakers cited the Millennium Bridge. He argued that computer stress tests for structures typically focus on external shocks such as storms, earthquakes or weight loads. The opening-day instability might have been dismissed as a rare “perfect storm.” In reality, however, the conditions that caused the instability were built into the system and could occur repeatedly. The point was clear: Risks embedded within a system may remain invisible until a critical threshold is crossed, but once that point is reached, collapse becomes difficult to prevent.

Three years later, the global financial crisis erupted, beginning with the U.S. subprime mortgage collapse. The warnings proved prescient. The two economists went on to become leading figures in the field. One was Raghuram Rajan, then chief economist at the International Monetary Fund and later governor of the Reserve Bank of India. The other was Shin Hyun-song, former economic adviser and head of research at the Bank for International Settlements, who has been nominated as governor of the Bank of Korea. Shin was the one who used the Millennium Bridge example.

Shin Hyun-song, nominee for Bank of Korea governor, answers reporters’ questions before heading to his confirmation hearing preparation office at Hanwha Finance Plaza in Jung District, Seoul, on March 31. [NEWS1]

Yet understanding risk and managing it are different matters. Rajan, who became India’s central bank governor in 2013, pursued financial reforms and interest rate increases to stabilize inflation. He soon faced resistance. Critics argued that his policies reflected a perspective shaped by global financial institutions rather than India’s domestic conditions. He was even labeled “anti-national” by some critics, according to India’s The Economic Times. After clashes with political leaders, he did not secure a second term and stepped down after three years.

Shin now stands before what could be described as Korea’s own Millennium Bridge, assuming he clears his confirmation hearing. Signs of instability are already visible. The dollar-won exchange rate has risen to around 1,500 won, levels seen during past crises. With the longest-ever gap between Korea and U.S. benchmark interest rates, excess liquidity is flowing into stocks, real estate and other sectors.

The question is whether the underlying risks, likened to a “perfect storm,” can be addressed before they materialize. Korea’s economic system, like the bridge, may appear stable until movements begin to align.

At the Jackson Hole meeting in 2005, Shin concluded his remarks by noting that the issue ultimately comes down to political will. The urgency of reform, he said, depends on how severe the next crisis is perceived to be. More than two decades later, he may soon be in a position to answer that question himself.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.