Cooperating intimately

Yoon Jeung-hyun, the minister at the Ministry of Strategy and Finance, and Kim Choong-soo, the newly appointed governor of Bank of Korea held their first official meeting on April 5. The meeting was to confirm cooperation and information sharing between both parties. Yoon and Kim met at the Bankers Club in Myung-dong at 7:30am to discuss various topics, including Korea’s recent economic condition, the need for cooperation between the government and the central bank and what agenda Korea should present as the host country at the upcoming G-20 Seoul Summit. This meeting between the two leaders of Korea’s economy was considered especially meaningful since it was held prior to the monetary policy meeting.

After the meeting, Yoon said, “Mr. Kim, who had worked at the OECD (Organization for Economic Co-operation and Development) gave me helpful advice on various sectors of government policy. We also had a productive and extensive discussion on economic conditions and the outlook of the Korean economy.”

Last year, there was an uncomfortable situation between Bank of Korea and the Financial Supervisory Service in regards to information sharing. When Bank of Korea demanded its supervisory rights on financial companies to coincide with the amendment of the Bank of Korea Act, conflict between the two bodies arose. To cope with the deepening conflict, the two bodies signed a memorandum of understanding regarding information sharing last September to rectify the situation. At the meeting, the two leaders went over the items listed on the MOU and agreed to work more closely and smoothly on matters regarding information sharing. One of the meeting attendees said that the two leaders spent a vast amount of time on issues regarding the upcoming G20 Seoul Summit. They also went over detailed issues discussed at the staff meeting held before the upcoming minister-level conference of G20 countries that is slated to be held on April 23 as well as any additional agenda that could be discussed at the Summit.

Yoon expressed his firm opinion on maintaining the government’s right to attend the Monetary Policy Committee. Since last January, Huh Kyung-wook, the first vice-minister has attended the Monetary Policy Meeting six times, exercising the government’s right to attend. Despite concerns over Bank of Korea’s independence, the government still claims it was a necessary and rightful act in order to strengthen cooperative ties between the two.

Meanwhile, Kim has been actively conducting public activities since taking office. Just five days after taking office, he had the above-mentioned meeting with the minister, and a day later held his first meeting with the CEO’s of ten major Korean banks. Meanwhile, the recently announced expected economic growth rate of Korea that Bank of Korea revised from 4.6% in December 2009 to 5% in April, is known to be influenced by Kim after he agreed to cooperate with the government at the above-mentioned meeting with the minister. “Exports have been constantly increasing on top of the recovery of domestic consumption and investment in plants and equipment. Compared to the recovery rate of December 2009, the global economic recovery has been obviously more apparent, while the growth rate of world trade is also showing an increase. We came to revise the economic growth rate of the first quarter to 5%, reflecting various economic indicators and considering the various government policies that were newly announced this year such as the 2010 Employment Recovery Project and the Stabilizing College Tuition Policy,” said a representative from Bank of Korea.