Central Bank Cooperation

In collaboration with the Korean government, the Bank of Korea has been participating in the establishment of major policies regarding international financial institutions, and has overall responsibility for cooperation with international financial organizations through exchanges and financial transactions. The Bank of Korea is also actively involved in exchanges and cooperative activities with international central bank cooperative bodies as well as other central banks worldwide, endeavoring to come up with effective policy responses to changes in the financial environment such as the integration of financial markets and globalization. Since the 1997 foreign currency crisis, the Bank of Korea, together with the Korean government, has exerted active efforts internationally to ensure that Korea's position is reflected and to share information on the issues of globalization, reforms of international financial organizations, restructuring of unsustainable sovereign debts, the development and implementation of international codes and standards, choice of appropriate exchange rate regime, combating the financing of terrorism and anti-money laundering measures.

Cooperation with Central Bank Cooperative Bodies

The financial environment has been dramatically changed as financial markets around the world have integrated rapidly with the financial innovation and globalization taking place since the mid-1980s. To pursue domestic financial market stability and to implement effective monetary policies, the Bank of Korea has made great efforts to cooperate with international central bank cooperative bodies and other nations' central banks. After becoming a member of SEANZA(abolished in 2020) in 1966, the Bank of Korea joined SEACEN in 1990, EMEAP in 1991 and the BIS in 1997. In these groups, the Bank of Korea works on maintaining close relationships with fellow member banks and on establishing an effective international cooperative structure for discussing current financial issues.

The Bank for International Settlements is the most representative cooperative body among central banks to date, and it is well known to the public through the term "BIS Capital Requirements" that is used to assess the soundness of private commercial banks.

The BIS was established in January 1930 based on the Hague Agreement for dealing with the issue of the reparation payments imposed on Germany after the end of World War I. Its head office is located in Basel, Switzerland, and 63 central banks from around the world are participating as its members. Initially, the role of the BIS was to acquire reparation payments from Germany, and to process capital settlements among countries and overall work related to the distribution of reparation payments. However, the BIS now focuses mostly on its function as a cooperative body of central banks that provides a forum for discussing current issues related to global finance.

The Bank of Korea had participated in the activities of the BIS partially as an observer from 1975 and became a member in January 1997. At that time, it contributed approximately 36.6 million US Dollars and had 3,000 shares allotted to it. It acquired 211 additional shares in 2005, by contributing 4.1 million US Dollars. As of October 2023, the Bank of Korea holds 0.57% of total BIS shares. The Bank of Korea has actively participated in regular meetings hosted by the BIS and strives to communicate with member central banks in the committees including Committee on Payments and Market Infrastructures, Committee on the Global Financial System, Markets Committee and Basel Committee on Banking Supervision.

Meanwhile, Bank of Korea’s Governor has been appointed as a member of the Board of Directors of the BIS and participates in the major decision making process regarding internal management and establishment of long-term strategy. In November 2023, Governor Chang Yong Rhee was appointed to the Chair of the Committee on the Global Financial System(CGFS), whose term is for three years, and he has led an analysis on global financial and economic issues and establishment of relevant policy measures. Considering that governors from G7 countries with great influence on international financial markets were nominated as Chair of the CGFS, Governor Rhee’s appointment can be seen as a result for confirming Bank of Korea’s contribution to the cooperation of central banks and improvement in Korea’s international prominence.

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EMEAP is a cooperative organization of central banks and monetary authorities in the East Asia and Pacific region that has been very active recently. EMEAP was established in Feburary 1991 to enable central banks within the region to jointly search for policy measures to assist them in smoothly adapting to the rapidly changing global economy and financial market in the 1990s. There are 11 members--the central banks of Korea, Japan, China, Australia, New Zealand, Hong Kong, Singapore, Thailand, Malaysia, Indonesia and the Philippines.

EMEAP's activities consist of regular Governors' Meetings, Deputies' Meetings and meetings various Working Groups. In particular, the Working Groups focus on the main areas of interest to central banks: financial markets, banking supervision, the payment and settlement systems, and information technology. Working-level experts from member banks participate in the Working Groups to conduct research and to discuss current issues and policies.

As a founding member, the Bank of Korea is actively participating in EMEAP and has a successful track record of organizing many meetings and conferences. Since 2000, the Bank of Korea has hosted the Governors’ Meeting three times, and the Deputies’ Meeting four times. In addition, the Bank of Korea has also organized multiple Working Group meetings.

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SEACEN is a cooperative body of central banks in the South East Asian region, established in February 1966 to develop experts through training and research on areas of common interest and to enable member banks to exchange information and opinions. As of the end of Aug. 2017, there are 19 members, - the central banks of Thailand, Malaysia, Philippines, Singapore, Sri Lanka, Indonesia, Nepal, Myanmar, Korea, Taipei, Mongolia, Brunei Darussalem, Cambodia, Papua New Guinea, and Vietnam, China, Lao PDR, India, and Hong Kong.

The Bank of Korea became the organization's 9th member in January 1990, upon approval of the 9th SEACEN Governors' Conference. The Bank of Korea hosted SEACEN Governors' Conferences in 1993 and 1999, and 2012.

SEACEN established the SEACEN Research and Training Centre (SEACEN Centre) in 1972, to facilitate member cooperation in research and training areas. The Centre conducts research on areas of common interest and hosts trainings, seminars and workshops for member bank employees with cooperation from international financial organizations such as the IMF, central banks of industrialized countries including the FRB, and member banks. The Bank of Korea has attended the Meeting of the SEACEN Board of Governors and The SEACEN Executive Committee Meeting every year. It is also actively participating in research and training activities at the SEACEN Centre, having hosted a total of 36 training courses, seminars, and workshops as of end-2022.

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