Bank of Korea Governor Lee Chang-yong estimated that if a situation similar to the Silicon Valley Bank (SVB) bankruptcy occurs in Korea, the speed of bank runs (deposit withdrawals) will be “100 times faster than in the United States.”
In an interview with Bloomberg News on the 13th (local time) during a business trip to Washington, DC, Governor Lee said, “This confusion has given me a lot of homework.”
President Lee said, “In Korea, digital banking has become much more widespread, especially among young people.” ”, he evaluated.
In response, he insisted, “It is necessary to prepare for the digital era, such as increasing the collateral ratio for daily net settlement.”
Governor Lee also dismissed the market’s expectations of a rate cut, saying that it was “going too far ahead.”
He emphasized, “It is only when we are confident in the expected inflation path that we will think about when to change our stance.” “It is still too early to be sure.”
This is the same content as emphasized several times that the market interest rate decline was ‘excessive’ at a press conference immediately after the Monetary Policy Committee (MPC) on the 11th.
Governor Lee added, “If the price path does not come down (for reasons such as oil prices), there are concerns that the policy will need to be readjusted.”
He promised that if he is sure that prices will converge to the 2% level in the future, he will “surely deliver it to the market.”
As for the current interest rate level, he assessed it as “tightening”, but added, “I don’t want to send the message that it is enough to automatically reduce inflation.” Its purpose is that there are many factors to consider, such as oil prices and exchange rates, which can stimulate inflation in the future.
However, he said he was more concerned about oil prices than the exchange rate.
When pointed out that the recent weakening of the won is the most serious among Asian countries, Governor Lee said, “I am not very concerned about the exchange rate. What we are more concerned about is the oil price path following OPEC+ production cuts and what will happen to US monetary policy in the future.” explained.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.