Bank of Korea governor Lee Ju-yeol. [Yonhap News Photo]
South Korea's central bank came under pressure Monday to soften its stance over a fiscal stimulus package called "quantitative easing" advocated by President Park Geun-hye to speed up the restructuring of ailing firms.
Vice Finance Minister Choi Sang-mock said there should be no discord in working out a South Korean style of quantitative easing to revitalize the economy, spur consumption and accelerate corporate restructuring.
"The government and the Bank of Korea (BOK) share their view that they should actively fulfill their duty for quick restructuring," he said, urging the central bank to be flexible in handling an "unexpected" change in market conditions.
He called for a coordinated role between the government and the central bank to proactively handle "financial volatility".
In response, BOK Governor Lee Ju-yeol said the central bank would "actively" carry out its duty in supporting restructuring. "Corporate restructuring is a very important task for our economy. The BOK will actively carry out its duty."
However, the governor cautioned that there should be no "public misunderstanding" about the injection of fresh capital into state-run lenders like the Korea Development Bank, a controversial issue that requires news legislation in parliament.
Previously the central bank has said it should stick to its basic role and carry out its duty within the framework of a law. Last week BOK deputy governor Yoon Myun-shik said the central bank should not be used for stopgap measures to issue banknotes or purchase bonds from state-run banks.
Aju News Lim Chang-won = cwlim34@ajunews.com
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