ID :
45567
Sat, 02/14/2009 - 12:00
Auther :
Shortlink :
https://www.oananews.org//node/45567
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(LEAD) FM, BOK head share view on revision of central bank law
SEOUL, Feb. 13 (Yonhap) -- South Korea's finance minister and the country's top central banker agreed Friday on the need to revise the nation's central bank law to better cope with financial and economic instability.
"We shared the view that there is a need to revise the role of the central bank
in the process of overcoming global financial turmoil," Bank of Korea (BOK) Gov.
Lee Seong-tae told reporters after a rare meeting with Finance Minister Yoon
Jeung-hyun.
"But we agreed that the issue be reviewed and studied for a sufficient period of
time since it is complicated," he said.
The law regulating the BOK was revised in 1998, making price stability the
central bank's top priority and giving its right to supervise local banks to the
Financial Supervisory Service, the financial watchdog.
But in the aftermath of the global financial meltdown, there have been calls to
revise the law so as to strengthen the BOK's role in stabilizing the financial
market and staving off an economic recession.
Critics say the central bank's current main goal is hampering efforts to deal
with the ongoing financial market jitters and the economic slowdown.
Yoon and Lee also pledged to work together to prevent the economy from slipping
into a recession.
"To overcome the current economic difficulties, there should be close cooperation
between the government and the central bank," said Yoon, who took office on
Tuesday when he warned that the economy will likely shrink 2 percent this year,
the first annual contraction since the 1997-98 Asian financial crisis.
Yoon's visit to the central bank was the first by a finance minister since 1998.
The finance minister rarely visits the central bank since it could be seen as a
move to try to influence monetary policy. The BOK law gives the central bank
independence from the government.
The meeting comes one day after the BOK cut its key interest rate by half a
percentage point to a record low of 2 percent, the sixth cut in four months, in
an attempt to jumpstart the sputtering economy. Since October, the BOK has
trimmed the rate by 3.25 percentage points.
sooyeon@yna.co.kr
(END)
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"We shared the view that there is a need to revise the role of the central bank
in the process of overcoming global financial turmoil," Bank of Korea (BOK) Gov.
Lee Seong-tae told reporters after a rare meeting with Finance Minister Yoon
Jeung-hyun.
"But we agreed that the issue be reviewed and studied for a sufficient period of
time since it is complicated," he said.
The law regulating the BOK was revised in 1998, making price stability the
central bank's top priority and giving its right to supervise local banks to the
Financial Supervisory Service, the financial watchdog.
But in the aftermath of the global financial meltdown, there have been calls to
revise the law so as to strengthen the BOK's role in stabilizing the financial
market and staving off an economic recession.
Critics say the central bank's current main goal is hampering efforts to deal
with the ongoing financial market jitters and the economic slowdown.
Yoon and Lee also pledged to work together to prevent the economy from slipping
into a recession.
"To overcome the current economic difficulties, there should be close cooperation
between the government and the central bank," said Yoon, who took office on
Tuesday when he warned that the economy will likely shrink 2 percent this year,
the first annual contraction since the 1997-98 Asian financial crisis.
Yoon's visit to the central bank was the first by a finance minister since 1998.
The finance minister rarely visits the central bank since it could be seen as a
move to try to influence monetary policy. The BOK law gives the central bank
independence from the government.
The meeting comes one day after the BOK cut its key interest rate by half a
percentage point to a record low of 2 percent, the sixth cut in four months, in
an attempt to jumpstart the sputtering economy. Since October, the BOK has
trimmed the rate by 3.25 percentage points.
sooyeon@yna.co.kr
(END)
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