I would like to extend you all a very warm welcome to the 2015 Bank of Korea International Conference in Seoul on June 8-9. The global economy has come a long way since the Global Financial Crisis (GFC) and is now likely to embark on a ‘new normal’ path for growth, inflation, and interest rates. Smooth transition to the new normal may require novel institutions and policies in advanced economies and possibly emerging market economies (EMEs) as well. This year’s BOK international conference is dedicated to this global effort under its main theme of “Global Interest Rate Normalization and Monetary Policy Challenges.”

Deploying unconventional measures—such as asset purchase programs and very-low policy rates to recover from a global financial meltdown upon the GFC—has been conceived as temporary. Restoring a normal monetary policy regime now appears to be warranted. While authorities in the eurozone and Japan are still relying on unconventional measures owing to lackluster growth and deflationary pressures, the U.S. Federal Reserve is expected to leave the zero-interest-rate bound behind.

Global interest rate normalization may evoke multifaceted repercussions. It will have diverse impacts on liquidity outflows from EMEs, heightening risk awareness and volatility in financial markets. Although concerted monetary easing across the globe has helped reinvigorate many economies, very-low policy rates accompanied by liquidity expansions may put structural reforms on hold, especially in highly indebted countries. Addressing this risk and challenge through well-designed macroeconomic policies and structural reforms will help the corresponding economies benefit from interest rate normalization. The long-heralded process of global interest rate normalization should lay a strong foundation for financial market disciplines—this will be integral to creative and sustainable growth.

Against this backdrop, the BOK International Conference comes at an opportune moment with interesting topics which will have echo in the coming years. Starting with envisaging interest rate normalization, the sessions will cover issues on cross-border liquidity, impacts of liquidity flows on high-leverage economies, and harmonizing the sectoral and macro aspects of monetary policy. Throughout the conference, appropriate policy responses and coordination during transitions to the new normal will be discussed, and the panel session is dedicated to discussions on policy challenges and proactive policy reactions. We expect the conference to offer all participants a timely and constructive forum for sharing valuable perspectives and insights.

Taking this opportunity, I would like to express my sincere gratitude to the conference speakers, discussants, panelists, and moderators. I also appreciate Professors Thomas J. Sargent and Barry Eichengreen for their thoughtful advices and the conference organizers at the Bank of Korea. I warmly welcome all participants again and wish you all a most enjoyable stay in Seoul.

• 
• Juyeol Lee
• Governor
• The Bank of Korea