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| Former Vice Minister of Economy and Finance Kim Yong-beom speaks during a meeting at the Korea Federation of Banks headquarters in Seoul in this March file photo. Courtesy of Ministry of Economy and Finance |
BOK union asks governor to guarantee autonomy from gov't
By Park Jae-hyuk
The possible appointment of Kim Yong-beom, former vice minister of economy and finance, as a new member of the Bank of Korea's (BOK) monetary policy board has reignited a long-standing controversy over the central bank's autonomy from the government.
Since Koh Seung-beom left the board last month after being appointed as chairman of the Financial Services Commission (FSC), Kim has been viewed as the most likely successor to be recommended by BOK Governor Lee Ju-yeol.
Speculation has been backed by the fact that the central bank chief worked well with the government when Koh was serving as a board member. Both Kim and Koh have spent most of their careers at the finance ministry and the FSC.
The BOK union, however, expressed concerns over the government's growing influence on the central bank, crying foul over the dominance of the so-called "Mofia," a portmanteau of the "Ministry of Finance (MOF)" and "mafia."
"There are rumors that a former finance ministry official is aiming to become a monetary policy board member, whose independence from the government should be guaranteed," the union said in a statement. "Will another former finance ministry official fill the position of a member recommended by the BOK governor, despite being a seat that had been given to a member recommended by the finance minister?"
The monetary policy board is comprised of seven members, most of whom are treated as vice-ministerial-level officials. Except for the BOK governor and the senior deputy governor, both of whom are ex officio members, the remaining five seats are given to those recommended by the BOK governor, the finance minister, the FSC chairman, the Korea Chamber of Commerce & Industry (KCCI) chairman and the Korea Federation of Banks chairman. The President gives final approval to their appointments.
The new appointment is expected to come before the board's meeting on Oct. 12, and the appointee will complete Koh's remaining term until April 2023. Koh became a board member in April 2016, on recommendation by the FSC chairman. His term was extended for three more years in April last year on recommendation by the BOK governor.
At this moment, Kim is ostensibly irrelevant to the finance ministry, because he has not taken any position at the government since his resignation as vice finance minister in March. However, there remains the possibility of Kim returning to the government again, given that several former monetary policy board members, including Koh, had been given ministerial-level posts.
"We hope the governor does not humiliate his predecessors, who struggled to achieve independence from the government," the BOK union said.
The nation's central bank has continued to face threats to its autonomy.
A few days before the key interest rate hike in August, presidential chief of staff for policy Lee Ho-seung sparked a debate with his remarks about normalizing monetary policies to control household debt, which were interpreted as potentially signaling an interest rate hike.
The BOK governor also voiced his concern earlier this year over a bill proposed by ruling party lawmakers to force the central bank to buy treasury bonds directly from the government, so that the government can secure money to offer financial support to those facing difficulties during the COVID-19 pandemic.
