Asian central banks need to harmonize monetary and macro-prudential policies in a bid to better respond to a change in global economic conditions after the 2008 global financial crisis, the South Korean central banker said Monday.
“It became hard to set up monetary policy that is separated from financial stability. (Asian) central banks should be responsible for monetary and macro-prudential policies (together) in line with their specific conditions,” Bank of Korea (BOK) Governor Kim Choong-soo said at an opening speech for the meeting of South-East Asian Central Banks (SEACEN) governors held in central Seoul.
Kim noted that Asian central banks should chase both price stability and financial stability, stressing that the banks need to balance macro-prudential and micro-prudential policies under the changed global economic environment.
In the wake of the global financial crisis, emerging market economies recovered faster than advanced countries, and the Asian economy remained resilient from the negative spillover from the ongoing crisis in Europe, Kim said.
The governor, however, noted that Asian central bankers should bear in mind potential risks in the financial market, saying that it is needed to step up cooperation for regional financial stability among central bankers.