After achieving independence on 15 august 1945, the Korean
economy was in a miserable conditions. Facing the severe inflation and bad
financial disorders. It was established on June 12, 1950 in Seoul,
South Korea and Dr. Bloomfield was the person who was advisor to bank of Korean
between 1949 and 1950 dispatched a draft from FED and on the basis of this
draft, the bank act of Korea was passed. The bank was established under the
bank act of South Korea.
The Bank's foremost and
fundamental purpose is stabilization of prices. To attain this purpose, the
Bank focuses on inflation.
The consumer price inflation target for 2013-2015 is 0.5% to 3%. The currency
of South Korea is South Korean won.
Under the bank act of Korea article (1), the foremost and
fundamental purpose of the central bank of Korea is to maintain and pursue the
price stability.
The monetary policy committee is an important organization
of the bank of Korea. The important objective of the committee is formulation
of monetary policies.
The monetary committee comprises of 7 members. The governor,
senior deputy governor, one member recommended by minister of finance, one
member recommended by governor, one member recommended by the chairman of
financial services commission (south Koreas top financial regulator which makes
financial policies), one member recommended by the Koreas department of
commerce and industry and one member on the discretion of the chairman of
federation of banks of Korea.
All the members are appointed by the president for four year
term excluding the senior deputy governor, who got the term of office of three
years. All members serve full time basis and no member can be discharged from
office against his/her will.
If we talk about the executive, the executive is made up of
the governor, the senior deputy governor and remaining five deputy governors.
The governor who represents the bank, is appointed by the
president on the deliberation of state council. The term of governor is four
years and can be reappointed once. The senior deputy governor is assistant of
governor and appointed by the president on the advice of governor and all other
deputy governors are appointed by the governor. The auditor is also appointed
by the president on the recommendation of ministry of finance and strategy.
Which shows its least level of autonomy.
Eventually, the bank of korea is not fully autonomous and despite
that, the educational, economic, industrial development of korea is greater
than Pakistan. The pinching point about both the countries is that both got independence
in the same decade and now, South Korea is stronger than Pakistan in every
aspect, either be it economic, educational or industrial.
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