BOK chief nominee apologizes over asset, nationality controversies at hearing

Bank of Korea (BOK) Gov. nominee Shin Hyun-song answers lawmakers’ questions during a parliamentary confirmation hearing at the National Assembly in Seoul, Wednesday. Yonhap

Bank of Korea (BOK) Gov. nominee Shin Hyun-song apologized to the public during a parliamentary confirmation hearing, Wednesday, over a series of controversies surrounding his ownership of multiple homes, his family’s foreign nationalities and his concentration of assets in foreign currencies.

Shin, who served as the head of the monetary and economic department at the Bank for International Settlements, said he was “deeply sorry for causing concern over personal matters during the confirmation process.”

While acknowledging that issues related to nationality and other administrative procedures were an “oversight” stemming from his extended stay abroad, he denied pursuing any personal or family gain.

He added that he would resolve all outstanding concerns and ensure no suspicions remain, pledging to act in line with the responsibilities of a public official.

Criticism ahead of the hearing centered on his ownership of three properties at home and abroad, which runs counter to the Lee Jae Myung administration’s policy direction of tightening regulations on multi-home ownership to curb speculative demand and restore housing as a means of residence.

In particular, he came under fire for engaging in so-called gap investment — a leveraged strategy in which a property with a small gap between its purchase price and lease deposit is acquired using a tenant’s deposit — a method widely regarded as speculative.

The transaction reportedly resulted in a capital gain of 2.2 billion won ($1.5 million) over 11 years as the apartment’s value increased.

Questions were also raised over allowing his mother to live in the property rent-free without a deposit.

Additional controversy arose from the fact that all of his family members hold foreign citizenship and that more than 90 percent of his financial assets are held in foreign currencies.

Responding to the criticism, Shin said, “The decision was aimed at supporting my mother’s living expenses rather than for speculative purposes. If the current arrangement is classified as a gift, I will consult a tax agent and take appropriate measures.”

As for his foreign currency assets, he said a large portion has already been sold and converted into won, adding that he plans to further reduce such holdings going forward.

“I am aware that such issues may not sit well with the public, but there were no intentional actions aimed at making a profit,” he said. “Although I spent many years overseas, I have long intended to contribute to the Korean economy, and I returned home viewing this nomination as a final opportunity to serve.”

Addressing concerns over the prolonged weakness of the won, Shin pointed to the significant role of offshore transactions.

“When the financial system experiences shocks, markets can move through channels that are not fully captured in official capital flow data. The forward market, particularly offshore non-deliverable forward trading, appears to play a critical role,” he said.

Shin emphasized that efforts to promote the internationalization of the won, including the establishment of an offshore won settlement system, are partly aimed at better managing exchange rate stability and enhancing the currency’s global standing.