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.
Financial Cooperation with International Financial Institutions
The Bank of Korea aims to achieve full reflection of Korea's positions on major policy issues, by participating in various conferences such as annual meetings held by international financial organizations. It is also responsible for negotiations with such organizations, and invests, contributes and participates in other financial transactions with them. Article 85 of the The Bank of Korea Act stipulates that the Bank of Korea shall represent the Korean government in dealing with international institutions. Based on this law and other related regulations, the Governor of the Bank of Korea represents Korea in the Bank for International Settlements meetings as a Governor and in other international financial meetings as an Alternate Governor.
In addition, the Bank of Korea serves as a deposit point for such international financial institution's assets in Korean Won and other foreign currencies. The Bank of Korea maintains current deposit or call deposit accounts of these organizations, and holds securities acquired by them in Korea.
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 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.
Cooperating with International Consultative Bodies
Since the financial crisis that hit emerging markets at the end of the 1990s, a consensus has been formed in the international community that the international financial system needs to be strengthened in order to maximize the benefits of globalization and financial market opening, and to minimize the harmful side effects stemming from rapid capital movements. Furthermore, as the economic importance of emerging market countries has grown, there has been a recognition that advanced countries, emerging market economies and International Financial Institutions need to forge joint responses to efficiently handle issues related to reforming the international financial system. As a result, various consultative bodies, such as the G-20, the Financial Stability Board, ASEAN+3 and the Manila Framework Group, have been newly established. The Bank of Korea participates in meetings of these bodies, together with the Korean government, to share Korea's experiences in overcoming crisis with other countries, and to consult on policy measures. The Bank of Korea is also striving to have Korea's position reflected as much as possible in reforming of the international financial system.
Other International Cooperation Activities
In addition to the areas of international cooperation already mentioned, the Bank of Korea makes a variety of other efforts to strengthen the foundation for its cooperation with other central banks and the international financial sector.
First, in order to strengthen its relationships with other central banks through the sharing of policy experiences and staff exchanges, the Bank of Korea has been holding an annual Central Banking Seminar since 1989, in which central bankers from around the world - from advanced countries including the US, UK and Germany, from emerging markets, and from transitional economies - give presentations on and discuss issues of mutual interest and other policy matters.
With Korea taking on a more significant role in the global economy, the Bank of Korea (BOK) launched the Knowledge Partnership Program (BOK-KPP) in 2015, which provides developing countries’ central banks with tailored policy consultation and training program. It aims to promote financial market development and macroeconomic policies in order to support the long-term economic growth of the countries, and enhance their expertise in the fields of central banking.
As a member of the Korean government delegation, the Bank of Korea participates in various economic conferences, such as those held by the OECD. The Bank of Korea also takes an active part in annual meetings with international credit rating agencies, including S&P, Moody's, and Fitch.