BOK chief stresses financial stability amid uncertainties

All News 09:43 October 22, 2014

SEOUL, Oct. 22 (Yonhap) -- Bank of Korea (BOK) Governor Lee Ju-yeol on Wednesday emphasized the need to bolster financial stability to brace for a negative change of course in the global economy.

Speaking at a financial forum in Seoul, Lee told participants that Asia's fourth-largest economy should improve its economic fundamentals as well as resilience to effectively cope with negative spillover effects stemming from changes in external circumstances, according to documents released by the BOK.

The BOK chief said the country should step up measures to support growth and financial stability as well as ease regulations to bolster growth momentum.

In the mid- to long-term, structural innovations to prop up the country's waning labor force should be considered, he added.

A report by the International Monetary Fund has forecast Korea's potential growth rate to rise by 1.25 percentage point over the next decade if the country successfully achieves structural innovation and deregulation in the labor market.

Lee also said efforts should be put into easing the income imbalance between corporations and households in order for growth and income to improve together.

The BOK chief's remarks come as the country is struggling to prop up growth and consumption as well as counter structural changes such as a rapidly aging population.

Last week, the central bank lowered its 2014 growth outlook for the country to 3.5 percent from 3.8 percent. It also trimmed its forecast for next year to 3.9 percent from 4 percent.