IMF Urges South Korea: Increase Female Representation in Financial Sector

IMF Urges South Korea’s Financial Supervisory Service to Increase Female Representation

The Korean Financial Supervisory Service has been called upon by the International Monetary Fund (IMF) to address the demand for greater female representation within its ranks. IMF Managing Director, Kristalina Georgieva, emphasized the need for South Korea to reform its financial regulatory system to ensure gender diversity within the Bank of Korea’s Monetary Policy Committee.

Historical Lack of Female Representation

The Bank of Korea’s Monetary Policy Committee has historically had a low proportion of female members. It was only in 2004 that Lee Sung-nam became the first female member, after accumulating diverse experience in the financial sector. It took another ten years for the second female member, economist Im Ji-won from JP Morgan, to join the committee. In 2020, two female members served on the committee for a two-year term.

Political Affiliation and Potential Changes

Interestingly, female members have only been appointed by governments affiliated with the Democratic Party of Korea. However, if Governor Yoon Seok-yeol appoints a female economist to the currently vacant position in the Monetary Policy Committee, it would mark the first time a female member is appointed by a conservative government. Such a move could help bridge the gender gap within the committee and enhance decision-making diversity.

Beyond Gender Diversity

While gender diversity is an urgent matter, critics argue that the Monetary Policy Committee lacks diversity in terms of educational backgrounds. All committee members, including the Governor, Deputy Governor, and other members, have graduated from Seoul National University’s Economics or International Trade departments. This homogeneity may limit the committee’s ability to consider diverse perspectives.

IMF’s Call for Change

Georgieva’s demand for increased female representation within the Monetary Policy Committee reflects the IMF’s commitment to diversity and inclusive decision-making processes. By supporting changes in South Korea’s financial regulatory system, the IMF aims to ensure that monetary policy formulation and economic stability take into account a range of perspectives.

National Pension Service Extends Strategic Hedging Ratio

The National Pension Service has decided to extend the strategic hedging ratio until next year, allowing for a potential increase of up to 10%. This ratio aims to hedge against potential exchange rate losses.

Reasons for Extension

The extension of the strategic hedging ratio is in response to the continued high level of the exchange rate, which poses potential risks to the National Pension Service. By expanding the ratio, the aim is to prevent potential losses and ensure the stability of pension investments.

Foreign Exchange Swap Agreement

In addition to the extension of the strategic hedging ratio, the National Pension Service has also extended its foreign exchange swap agreement with the Bank of Korea until the end of next year. This agreement allows for hedging against exchange rate fluctuations without direct participation in the foreign exchange market.

Target Excess Return Rate and Future Outlook

The National Pension Service has maintained its target excess return rate for next year at 0.20%. This rate represents the level of return the fund management division aims to achieve above the market benchmark. By setting this target, the National Pension Service aims to maximize investment returns.

International Conference for Economic Cooperation

The government, IMF, Ministry of Economy and Finance, Bank of Korea, and Financial Services Commission jointly organized an international conference in Seoul. This conference, held after a six-year hiatus, aims to promote cooperation and exchange of ideas on economic and financial issues.

Promoting Global Economic Cooperation

The conference, taking place from the 14th to the 15th of the month, provides a platform for policymakers and experts to discuss global economic challenges and policy coordination. Through dialogue and collaboration, the goal is to contribute to global economic stability and sustainable development.

If you are curious about the source of the article, it is from the Korean Economy.

The article discusses the IMF’s call for increased female representation in South Korea’s Monetary Policy Committee. It highlights the historical lack of female representation and the efforts made by the IMF to increase gender diversity in leadership positions. The extension of the strategic hedging ratio by the National Pension Service is also mentioned, along with the extension of the foreign exchange swap agreement with the Bank of Korea. The article emphasizes the importance of diverse perspectives in decision-making processes and the need for cooperation and exchange of ideas in promoting global economic stability. The international conference organized by the government, IMF, Ministry of Economy and Finance, Bank of Korea, and Financial Services Commission is seen as a platform for such cooperation and exchange.