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[Newsmaker] Will new BOK chief pass the first test?

Nominee Lee Ju-yeol expected to undergo tough confirmation hearing

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Published : 2014-03-04 20:49
Updated : 2014-03-04 21:21

The nomination for the new governor of the Bank of Korea came as a bit of a surprise as many had speculated that President Park would pick an outsider with an academic or political background to guide the central bank amid increasing concerns over a volatile global economy.

Instead, on Monday Park nominated Lee Ju-yeol, the central bank’s former senior deputy governor, to take over the governorship after incumbent Kim Choong-soo completes his four-year term at the end of March.

Lee, who worked at the BOK for 35 years, has gained an extensive knowledge and experience in monetary policy while serving in different senior positions in the BOK, analysts said.
Lee Ju-yeol, former senior deputy governor of the Bank of Korea, attends a news conference in Seoul after being nominated as the new governor of the central bank on Monday. (Yonhap)

“There is little question of his expertise, but the question is whether he will survive the parliamentary hearing,” an analyst who declined to be named told The Korea Herald.

Lee will be the first governor of the BOK to go through a parliamentary confirmation hearing because of a change to a related law in 2012. His parliamentary confirmation hearing is scheduled for March 19.

The parliamentary confirmation hearing in Korea has a reputation for bringing in all sorts of accusations against candidates, even involving private matters and family issues.

It appears that Lee can expect a severe grilling by lawmakers. Some have already made speculations about Lee and his wife’s savings and his son’s military exemption.

Lee is said to have reported his total assets at around 1.4 billion won ($1.3 million) in 2012 when he was the senior deputy governor of the BOK. They include an apartment in Dongjak-gu, southern Seoul, and bank deposits, including those held by his wife and daughter.

Lee and his wife reportedly hold approximately 355 million won in savings ― an average of 44 million won at eight different saving banks.

In 2012, the financial regulators suspended operations of a number of savings banks due to their insufficient capital and liquidity. The problem is that Lee, then the BOK’s second-highest official, was a member of a committee that ruled on the suspension decision.

Lawmakers are expected to grill Lee over whether he took advantage of his position and pulled their money out before the suspension since the government guarantees only deposits of up to 50 million won if a bank is driven into insolvency.

It is also reported that while Lee completed his military service in the Air Force, his only son, a 32-year-old doctor, is said to have been exempted due to a torn ligament.

Lee, who worked at the BOK for 35 years from 1977 to 2012, served as senior deputy governor between 2009 and 2012.

By Oh Kyu-wook (596story@heraldcorp.com)

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