Posted : 2014-03-03 17:27
Updated : 2014-03-03 17:27

New central banker offers few surprises

President Park rules out inner circle members

By Kim Rahn, Kim Tae-gyu

Lee Joo-yeol
BOK gov. nominee

Lee Joo-yeol, nominee for head of the central bank, is expected to focus on policy continuity, at least for the time being, to ensure market stability, according to market experts, Monday.

The expectation came after President Park Geun-hye picked Lee, 62, former senior deputy governor at the Bank of Korea (BOK), for the top central banker position for a four-year term.

The pick came as a surprise as Park ruled out inner circle members, including Kim Kwang-doo, a chair professor at Sogang University and the chairman of the Institute for the Future of the State, a presidential think tank.

Japan's Nomura Securities expected no major changes under Lee's leadership, saying Korea faces neither inflation, nor deflation risks.

"The BOK's policy rate is already accommodative. We note that the government's recent policies on household debt and the housing market suggest reduced political risk of a rate cut," Nomura economist Kwon Young-sun said.

"If the BOK cuts rates due to political considerations, this could erode the government's efforts to increase fixed interest rate mortgages because people are likely to prefer a floating rate mortgage. Also, lower interest rates may encourage landlords to increase jeonse security deposits to offset a smaller amount of interest earned on deposits," he said.

Lee will take the office in April after going through National Assembly confirmation hearings.

Lee has held key positions at the BOK, such as head of the research and planning departments. As a senior deputy governor, he was member of the monetary policy committee.

"I feel a great responsibility. I'll study how I can make the BOK play its required role at this time and contribute to the nation's development," he said at a media briefing after the nomination.

The biggest task for Lee is how to ensure policy coordination with the government, according to analysts.

A former BOK official said on condition of anonymity, "The BOK is a policy organization on macroeconomy. It has to coordinate with the economic authorities, including the finance ministry and Cheong Wa Dae."

Citibank Korea CEO Ha Yung-ku said the new governor will have to focus on stabilizing the financial system.

"Across the world, central banks are concerned about deflation rather than inflation. Lee will also have to pay attention to low growth. It is important to seek a balance among various tasks related to the domestic and international financial systems," he said.

Another industry watcher said after the global financial crisis, it has become important for central banks to build new relationships with governments for financial market stability rather than just insisting on independence.

"I believe he can make a balance between the past and future concepts of the central bank. As he was a member of the BOK for a long time, he can get more agreement from other BOK members when cooperating with the government rather than a governor who is an outside figure," he said, asking not to be named.

Some observers expect that Lee will not just stick to the conventional primary mission of central banks — controlling the inflation rate in a very conservative manner.

At the time of the global financial crisis, he did not hesitate in supporting measures such as quickly slashing the benchmark interest rate and easing monetary circulation.

Strategy and Finance Minister Hyun Oh-seok said Lee has gained confidence from BOK members and has strong knowledge and experience in monetary policy. "He will help make the Korean economy stable, sustainable and balanced," he said.

The appointment of Lee was a surprise, as he was not on the top of the potential candidate list.

"It is time for a legitimate BOK man to become the chief of the organization. It is not desirable to appoint former bureaucrats to the position in turn," the former BOK official said.

A graduate of Yonsei University, Lee entered the BOK in 1977. He mainly worked in research, holding positions such as research department director general. He obtained a master's degree in economics at Pennsylvania State University.

In 2007, he became deputy governor for monetary policy, and was senior deputy governor between 2009 and 2012.

When leaving the BOK after 35 years, he criticized the current chief Kim Choong-soo for his unilateral efforts for change and globalization, which the former argued undermined the BOK's reputation and hurt its employees.

관련 한글 기사

朴대통령, 새 한은총재에 이주열 前한은 부총재 내정

'국제금융시장 식견ㆍ감각 갖춰'…첫 인사청문 대상

박근혜 대통령은 3일 차기 한국은행 총재에 이주열(62) 전 한국은행 부총재를 내정했다.

민경욱 청와대 대변인은 이날 청와대 춘추관에서 한 브리핑에서 '이 내정자는 한국은행 업무에 누구보다도 밝으며 판단력과 국제금융시장에 대한 식견과 감각을 갖췄다'며 '합리적이고 겸손하여 조직내 신망이 두터워 발탁했다'고 인선 배경을 설명했다.

강원 출신으로 연세대 경영학과를 졸업한 이 전 부총재는 1977년 한국은행에 입행, 해외조사실장·조사국장·정책기획국장을 거쳐 2007년 통화신용정책 부총재보, 2009∼2012년 부총재를 역임하는 등 35년여간 한국은행에서 근무했다.

현재 연세대 경제대학원 특임 교수로 자타가 공인하는 통화정책 전문가로 꼽히는 인사다.

이 후보자는 2012년 개정된 한국은행법에 따라 역대 한은총재 내정자로는 처음으로 국회 인사청문회를 거쳐야 한다. 후보자가 내정됨에 따라 국회는 20일 안에 청문회를 연 뒤 그로부터 사흘내 심사보고서 채택 여부를 결정한다.

민 대변인은 청문회 자료가 준비되는 대로 이번 주 중 국회에 인사청문회를 요청할 계획이라고 전했다.

이 후보자가 국회 청문회를 통과해 취임하면 임기는 2018년 3월까지 4년간이다.

현 김중수 총재는 이명박 정부 시절이던 2010년 임명돼 임기가 이달 말로 끝난다.

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