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BOK Gov. Kim Choong-soo (Yonhap News) |
South Korea's top central banker stressed on Sunday the need to address global imbalances in a bid to prevent global financial turmoil, calling for swiftly setting "indicative guidelines" for current account imbalances.
In November, political leaders from the Group of 20 leading nations agreed to come up with indicative guidelines by the first half of this year to assess trade imbalances for preventive and corrective actions.
"We should step up efforts to resolve the global imbalances in trade and capital movements that were among the root causes of the global financial crisis," Bank of Korea (BOK) Gov. Kim Choong-soo said in a prepared speech released in advance for a conference on macro-prudential regulations.
"I hope that before long a consensus will be reached, under the aegis of the G-20, on indicative guidelines for current account positions designed to resolve the global imbalances."
Kim also said that in the wake of the global financial crisis the danger of systemic risk was recognized, raising the need to enhance macro-prudential soundness of the economy.
New bank capital and liquidity rules agreed on during the G-20 summit carry the possibility of conflicting with the interest rate-oriented monetary policy, and more studies will be needed, he added.
Leaders from the G-20 recognized that emerging countries could adopt macro-prudential measures to stem excessive foreign capital inflows.
As part of such efforts, South Korea will introduce a bank levy that will be imposed on non-deposit foreign currency borrowing in the second half. The government also imposed a tougher regulation on foreign currency forward positions held by domestic banks and local branches of foreign lenders and re-introduced a tax on foreign money invested in local state bonds.
(Yonhap News)
