ID :
209670
Tue, 09/27/2011 - 11:35
Auther :
Shortlink :
https://oananews.org//node/209670
The shortlink copeid
Lawmakers slam lobby for delaying choice of new BOK policymaker
SEOUL, Sept. 27 (Yonhap) -- South Korean opposition lawmakers blasted a major business lobby Tuesday for delaying its recommendation of a central bank board member, arguing a long absence of a policymaker will hurt the country's monetary policy.
The Korea Chamber of Commerce and Industry (KCCI) has failed to recommend a Bank of Korea (BOK) policymaker for more than one year, which many argue could become a hurdle for the BOK in managing the country's monetary policy. Without the additional policymaker, the now six-member BOK is devoid of a tie-breaking vote.
The BOK's monetary policy committee normally consists of seven members, including the governor and the senior deputy governor, who are ex-officio members of the board. Another five policymakers are appointed by South Korea's President after receiving recommendations from several agencies, including the finance ministry and the financial regulator Financial Services Commission.
But since April last year, the BOK's board has been operating one member short, the longest absence ever, as the KCCI and President Lee Myung-bak are dragging their feet in recommending and appointing a new board member, respectively.
During an annual audit of the central bank, opposition lawmakers argued that the presidential office has been putting off naming a policymaker in what is seen as its intent to pick someone who would toe the line with the government.
In response, KCCI Chairman Sohn Kyung-shik told lawmakers that the business organization is awaiting a signal from the government.
"We are waiting for opinions from the government (for the next BOK policymaker)," he said.
Sohn admitted that his agency's right to recommend a board member has not been fully exercised as guaranteed by law, adding that it is kind of "practice" that the organization has consulted with the government before recommending a BOK board member.
Experts say that the delay in appointing a BOK policymaker will be all the more troubling as four exiting members, including the senior deputy governor, will end their four-year terms in April next year.
Under the current six-member composition, the BOK governor, also serving as chairman of the board, cannot exercise a casting vote if opinions are evenly divided.
If votes are equally divided, the proposal is voted down, thereby making the committee follow the results of a rate decision made in the previous month. This indicates that a vacancy in the committee could affect the direction of the monetary policy.
The BOK has been embroiled in the dispute over whether it could maintain independence in managing its rate policy as the government began to send its vice finance minister in January last year to the bank's rate-setting session.
The BOK froze its key interest rate at 3.25 percent for the third straight month as heightened economic uncertainty overshadowed lingering concerns about high inflation.
The Korea Chamber of Commerce and Industry (KCCI) has failed to recommend a Bank of Korea (BOK) policymaker for more than one year, which many argue could become a hurdle for the BOK in managing the country's monetary policy. Without the additional policymaker, the now six-member BOK is devoid of a tie-breaking vote.
The BOK's monetary policy committee normally consists of seven members, including the governor and the senior deputy governor, who are ex-officio members of the board. Another five policymakers are appointed by South Korea's President after receiving recommendations from several agencies, including the finance ministry and the financial regulator Financial Services Commission.
But since April last year, the BOK's board has been operating one member short, the longest absence ever, as the KCCI and President Lee Myung-bak are dragging their feet in recommending and appointing a new board member, respectively.
During an annual audit of the central bank, opposition lawmakers argued that the presidential office has been putting off naming a policymaker in what is seen as its intent to pick someone who would toe the line with the government.
In response, KCCI Chairman Sohn Kyung-shik told lawmakers that the business organization is awaiting a signal from the government.
"We are waiting for opinions from the government (for the next BOK policymaker)," he said.
Sohn admitted that his agency's right to recommend a board member has not been fully exercised as guaranteed by law, adding that it is kind of "practice" that the organization has consulted with the government before recommending a BOK board member.
Experts say that the delay in appointing a BOK policymaker will be all the more troubling as four exiting members, including the senior deputy governor, will end their four-year terms in April next year.
Under the current six-member composition, the BOK governor, also serving as chairman of the board, cannot exercise a casting vote if opinions are evenly divided.
If votes are equally divided, the proposal is voted down, thereby making the committee follow the results of a rate decision made in the previous month. This indicates that a vacancy in the committee could affect the direction of the monetary policy.
The BOK has been embroiled in the dispute over whether it could maintain independence in managing its rate policy as the government began to send its vice finance minister in January last year to the bank's rate-setting session.
The BOK froze its key interest rate at 3.25 percent for the third straight month as heightened economic uncertainty overshadowed lingering concerns about high inflation.
