Economy - The Korea Times

BOK governor draws criticism for 'overstepping' bank's traditional jurisdiction

The Bank of Korea (BOK) has been dispatching a larger number of employees to government ministries, the National Assembly, Korea’s diplomatic missions abroad and other institutions across both public and private sectors since Gov. Rhee Chang-yong became head of the central bank in 2022. The move reflects Rhee’s more outspoken approach, compared to his predecessors, in addressing the need for structural reforms to boost Korea’s growth potential. However, the initiative is also drawing criticism, with some arguing that the central bank chief may be overstepping the BOK’s traditional jurisdiction on monetary policy. According to BOK data, the number of employees dispatched to external organizations increased from 39 in 2021 to 49 in 2025. Notably, several institutions received BOK staff for the first time this year. Among the new destinations were the Presidential Committee for National Cohesion; Presidential Committee on Ageing Society and Population Policy; Ministry of Land, Infrastructure and Transport; and Ministry of Trade, Industry and Energy. These additions joined long-standin

Aug 18, 2025By Yi Whan-woo

BOK governor draws criticism for 'overstepping' bank's traditional jurisdiction

KOSPI remains in trading range, raises concern over momentum in 2nd half

The benchmark KOSPI is raising concerns about whether it is losing upward momentum, after recording its steepest rally in 26 years during the first half. So far this month, KOSPI has gained just 0.32 percent, trading sideways in a narrow range between 3,100 and 3,200 points. It currently ranks 22nd in performance among 30 major global indices. This lackluster showing stands in stark contrast to the first six months of the year, when KOSPI surged 28.04 percent, its quickest growth since 1999 and the strongest among all 30 global markets. Analysts said Sunday that the Korean stock market may lose steam for the remainder of 2025 unless the government delivers a consistent policy direction to address the longstanding “Korea discount” on valuations. “A return to higher capital gains taxes clearly defied market expectations and is now weighing on investor sentiment,” Roh Dong-gil, an analyst at Shinhan Securities, said. Roh was referring to the government’s recent tax code revision, which has drawn backlash from retail investors for reviving a controversial threshold on capital gains

Aug 17, 2025By Yi Whan-woo

KOSPI remains in trading range, raises concern over momentum in 2nd half

Businesses wary as pro-Lee progressives take helm of key oversight agencies

Businesses are on edge as the heads of the Fair Trade Commission (FTC), Financial Supervisory Service (FSS) and National Tax Service (NTS) — powerful regulatory bodies overseeing corporate practices — are now occupied by progressives appointed by President Lee Jae Myung, signaling tighter corporate oversight, according to government and business officials Friday. The FTC imposes fines, pursues criminal cases and regulates corporate governance in response to unfair trade practices, while the FSS takes action against stock manipulation, insider trading and accounting irregularities. The NTS monitors corporate tax evasion and improper share transfers through special audits. All three watchdog chiefs are also known for their close ties to President Lee, and are considered both progressive and strong-willed. Ju Biung-ghi, the Seoul National University economics professor nominated to head the FTC, is known as Lee’s “economic mentor.” Given his emphasis on fairness and redistribution, Ju is expected to tighten regulations on unfair practices by conglomerates and large corporations on

Aug 15, 2025By Jun Ji-hye

Businesses wary as pro-Lee progressives take helm of key oversight agencies

9 tourist destinations included in 'second home' policy to bolster housing markets with waning populations

Nine popular tourist destinations will be added to the list of rural cities and smaller regions with housing tax exemptions for second property purchases, according to government officials on Thursday. The new locations are Gangneung, Donghae, Sokcho and Inje in Gangwon Province; Iksan in North Jeolla Province; Gyeongju and Gimcheon in North Gyeongsang Province; and Sacheon and Tongyeong in South Gyeongsang Province. Announced during an economic ministers’ meeting on Thursday, these areas will join the existing list of 83 regions covered under the so-called “second home” policy. First introduced in 2024 under the Yoon Suk Yeol administration, the policy is aimed at combating depopulation in rural communities. It offers exemptions on three types of housing taxes — property tax, capital gains tax and the comprehensive real estate tax — to homeowners from outside the designated regions who purchase a second property in one of the areas covered by the policy. While all 83 regions are considered at risk of extinction, authorities were initially cautious about including popular touris

Aug 14, 2025By Yi Whan-woo

9 tourist destinations included in 'second home' policy to bolster housing markets with waning populations

Financial authority overhaul plan put on backburner

Discussions on the reorganization of financial authorities under the Lee Jae Myung administration are expected to be extended after the plan was omitted from the presidential committee’s announcement of the new government’s five-year blueprint, officials said Thursday. It had been widely anticipated that the plan would be unveiled during a public briefing by the State Affairs Planning Committee held Wednesday. However, the proposal was not announced at the event. A committee official noted that the focus will remain on the other 123 key state projects for now. According to government insiders, the committee has already submitted the restructuring plan to the presidential office, recommending that the Financial Services Commission’s (FSC) financial policy functions be separated from its supervisory responsibilities. Under the plan, the FSC’s role in financial policy would be absorbed by the Ministry of Economy and Finance, while oversight duties would be transferred to the Financial Supervisory Service (FSS), effectively dismantling the FSC, the country’s top financial regulator

Aug 14, 2025By Jun Ji-hye

Financial authority overhaul plan put on backburner

Ex-bureaucrat to head FSC, president's close aide to lead FSS as 1st financial leadership team

President Lee Jae Myung has nominated a Financial Services Commission (FSC) chief from the government bureaucracy and appointed a close aide as head of the Financial Supervisory Service (FSS). On Wednesday, Lee nominated Lee Eog-weon, former first vice finance minister, to head the FSC, the nation’s top financial regulator. On the same day, the FSC recommended lawyer Lee Chan-jin for the post of FSS governor, the country’s financial watchdog. The FSC chairmanship, a minister-level position, requires a confirmation hearing by the National Assembly, whereas the FSS governorship, a vice minister-level post, does not. The FSS governor is appointed by the president following a recommendation from the FSC chairman. Current FSC Chairman Kim Byoung-hwan convened a meeting on Wednesday to approve the recommendation of Lee Chan-jin, and the inauguration ceremony was held Thursday afternoon. FSC chairman nominee Lee Eog-weon is a veteran economic policymaker from the Ministry of Economy and Finance, recognized for his steady, pragmatic leadership and expertise in macroeconomics. He has held key

Aug 14, 2025By Jun Ji-hye

Ex-bureaucrat to head FSC, president's close aide to lead FSS as 1st financial leadership team

InterviewSociologist's 'library without walls' fights social isolation, depopulation

As social isolation and rural depopulation deepen amid Korea’s demographic crisis, sociologist Kim Seung-soo is transforming a simple book-sharing initiative into a nationwide community-building campaign. In 2012, Kim launched “Knock Knock Library,” an online platform that connects neighbors and allows them to knock on each other’s doors to borrow books in his neighborhood in Paju, Gyeonggi Province. Since then, the grassroots movement has evolved into a vibrant community platform fostering stronger neighborhood ties through shared activities. The platform currently has 30 to 50 daily users, and the range of shared items has expanded well beyond books to include seasonal treats like freshly boiled corn and kimchi, as well as children’s clothing, travel gear and more. It has also become a hub for community potlucks, drawing sessions, running clubs and other small-scale local gatherings. The idea has resonated far beyond Paju, inspiring residents in more than 130 cities and smaller towns to start their own versions of the network. Participants now include neighbors from Seoul, Dae

Aug 14, 2025By Yi Whan-woo

Sociologist's 'library without walls' fights social isolation, depopulation

AI, energy drive Korea’s innovation strategy

Korea is seeking to position itself at the forefront of the global innovation race, unveiling a sweeping five-year economic strategy built on industries such as artificial intelligence (AI), biotechnology and clean energy to overcome its stagnation crisis and secure leadership in the high-tech sectors. The State Affairs Planning Committee announced a five-year plan for President Lee Jae Myung’s administration Wednesday, consisting of three major governing principles, five main policy goals and 123 key national tasks, fiscal support plans and legislative initiatives. “Korea’s growth engine is losing steam, putting the nation’s potential growth rate at risk of falling to zero. Capital remains heavily concentrated in real estate, holding back the broader economy. In this changed environment, we need to rebuild the framework for growth from the ground up,” Rep. Jung Tae-ho of the ruling Democratic Party of Korea said during a policy briefing at Cheong Wa Dae, the former official presidential office, in Seoul. Jung heads one of the committee’s two economy-related subcommittees.

Aug 13, 2025By Lee Gyu-lee

AI, energy drive Korea’s innovation strategy

Lee hints at expansionary fiscal policy to spur growth

President Lee Jae Myung on Wednesday raised the possibility of supporting an expansionary fiscal policy, calling for measures to improve the efficiency in government spending to boost economic growth. Lee voiced concerns over limited financial resources to push forward government initiatives during a meeting with financial officials and economic experts to discuss ways to improve efficiency in budget spending. "Although fiscal policy should serve as a catalyst for growth, tax revenues are decreasing. The slowdown in economic growth has reduced revenue, making national finances vulnerable," Lee said. Lee urged participants to find ways to redirect wasteful spending toward priority areas that can stimulate the economy and improve livelihoods, while considering ways to increase government finances. "If you can sow a bushel of seeds now and harvest a sack of grain in the fall, shouldn't you borrow the seeds and sow them?" he said. "When I try to borrow seeds from the neighbor, there are people who argue, 'Why borrow? You should live within your means.'" His remarks were seen as backing an exp

Aug 13, 2025By Yonhap

Lee hints at expansionary fiscal policy to spur growth

Delayed overhaul of financial authorities deepens rift, stalls policies

The turf war between the Financial Services Commission (FSC), the country’s top financial regulator, and the Financial Supervisory Service (FSS), the financial watchdog, has intensified amid prolonged discussions over restructuring the country’s financial authorities since the inauguration of the Lee Jae Myung administration on June 4. The delay has also postponed the appointment of new leaders for both agencies, disrupting key financial initiatives such as the approval of the country’s fourth internet-only bank. The State Affairs Planning Committee, responsible for outlining a five-year policy road map for the Lee administration, is scheduled to announce major national projects, including the financial regulatory restructuring plan, around Wednesday before wrapping up its activities on Thursday. The committee already presented a restructuring proposal to the presidential office, suggesting the separation of the FSC’s financial policy role from its supervisory duties. According to the proposal, the FSC’s financial policy function would be integrated into the Ministry of Economy

Aug 10, 2025By Jun Ji-hye

Policy