Bank of Korea scores low on independence

The Bank of Korea has been ranked toward the bottom among central banks worldwide in terms of independence from government influence.

It ranked 65th out of 89 central banks in the category, while placing 21st out of 120 for transparency, according to a research paper by professor Barry Eichengreen of University of California, Berkeley.

The Korean central bank scored 8.5 points out of 15 in total in the transparency category.

The research paper evaluated central banks’ independence by looking into whether their monetary policymaking was influenced and intervened by the central government.

It also included seeing whether central banks had a fair process of appointing monetary policy committee members.

The Reserve Bank of India ranked the lowest at 89th place.

The National Bank of the Kyrgyz Republic, the National Bank of Latvia and the European Central Bank were the three most independent entities. The Korean central bank lowered its key rate after being pressured by the government last May.

The BOK, meanwhile, received a relatively good score for maintaining transparency with detailed disclosures of its monetary policy meetings and minutes.

The Riksbank, Sweden’s central bank, ranked first in transparency followed by the Reserve Bank of New Zealand and Magyar Nemzeti Bank, the central bank of Hungary.

By Park Hyong-ki (hkp@heraldcorp.com)