The Bank of Korea (BOK) is drawing internal attention to the succession of Deputy Governor Yoo Sang-dae, whose term expires next month on the 20th. With the Deputy Governor replacement scheduled ahead of the August Monetary Policy Committee meeting, bond markets are closely monitoring whether this personnel change will affect base rate decisions, as the Deputy Governor holds voting rights as an ex-officio Monetary Policy Committee member. According to the BOK on the 22nd, Deputy Governor Yoo, who took office on August 21, 2023, will complete his term next month on the 20th.
BOK Deputy Governor Appointment Process and Legal Framework
Four to five candidates are being discussed inside and outside the BOK, though the appointment direction is difficult to predict as the President holds the appointment authority. According to the Bank of Korea Act, the Deputy Governor is appointed by the President upon recommendation by the BOK Governor. The term is three years with one possible reappointment.
Internal Candidates: Park Jong-woo and Kwon Min-soo
Senior Deputy Governor Park Jong-woo and Senior Deputy Governor Kwon Min-soo are mentioned as internal candidates. If an internal promotion occurs, personnel changes could extend to Senior Deputy Governor and Director-General levels.
Park is recognized both internally and externally as a monetary policy expert. He built his career in the Policy Planning Department, Economic Research Institute, and Monetary Policy Department. During the post-COVID-19 tightening phase, he led "orderly" rate increases while handling monetary policy operations. As a former Financial Markets Department Director, his ability to read macroeconomic flows is considered a strength.
Kwon accumulated external sector experience through the International Department and Foreign Exchange Reserve Management Group. He gained policy collaboration experience through secondments to the Ministry of Foreign Affairs and Trade and the Ministry of Strategy and Finance. He is evaluated as having abundant ideas related to foreign exchange supply-demand and institutional improvements.
External BOK Alumni Candidates Under Consideration
BOK alumni in external positions are also mentioned as candidates.
Lee Hwan-seok, Vice President of Korea Housing Finance Corporation, previously served as BOK Survey Department Director and Senior Deputy Governor. He is evaluated as having deep thinking, quick judgment, and "virtuous leader" leadership.
Additionally, former Seoul Money Brokerage President Chung Kyu-il and former Heungkuk Life Insurance President Lim Hyung-joon are mentioned as BOK alumni. Former President Chung served as BOK Economic Statistics Department Director and Senior Deputy Governor. Former President Lim served as Personnel Management Department Director and Senior Deputy Governor.
Bond Market Monitors Succession Impact on Rate Decisions
Bond markets are watching this personnel change's impact on future base rate paths, particularly regarding consecutive rate hikes.
A securities firm bond dealer stated, "If an external candidate is appointed, sufficient time may be needed to grasp the macroeconomic situation before Monetary Policy Committee participation," adding "there is a possibility that active decision-making could be limited initially."
However, some analysts note that considering the precedent of rate hikes during past Governor vacancies, the personnel variable's actual impact on policy decisions may be limited. If an internal candidate is promoted, a significant adaptation period may not be necessary.
The Monetary Policy Committee raised the base rate from 1.25% to 1.50% in April 2022 during the period when the Governor position was vacant after former Governor Lee Ju-yeol's retirement.
FAQ
When does BOK Deputy Governor Yoo Sang-dae's term expire?
Deputy Governor Yoo Sang-dae's term expires next month on the 20th. He took office on August 21, 2023, and will complete his three-year term next month on the 20th.
Who are the main candidates to succeed BOK Deputy Governor Yoo Sang-dae?
Internal candidates include Senior Deputy Governor Park Jong-woo, a monetary policy expert who led rate increases during the post-COVID-19 tightening phase, and Senior Deputy Governor Kwon Min-soo, who has external sector experience. External BOK alumni candidates include Lee Hwan-seok (Korea Housing Finance Corporation Vice President), former Seoul Money Brokerage President Chung Kyu-il, and former Heungkuk Life Insurance President Lim Hyung-joon.
Why is the bond market monitoring the BOK Deputy Governor succession?
The Deputy Governor holds voting rights as an ex-officio Monetary Policy Committee member. Bond markets are watching whether the personnel change will affect base rate decisions, particularly regarding consecutive rate hikes. The replacement is scheduled ahead of the August Monetary Policy Committee meeting.
