Bank of Korea Governor Shin Hyun-song is overhauling the central bank's organization, reshaping personnel decisions and reporting lines. After launching a director-level panel reporting directly to the governor to supplement a reporting structure divided among deputy governors, Shin made appointments that departed from established promotion paths. The moves aim to consolidate information and decision-making that had been scattered across departments and to change internal personnel practices.
At a parliamentary audit by the National Assembly's Finance, Economy and Planning Committee on the 12th, Shin was asked by Rep. Lee Kwang-jae of the Democratic Party what institutional improvements the BOK needs. "The most important management principle I have been pursuing since coming to the BOK is removing internal barriers," he said. Citing his experience at the Bank for International Settlements, Shin said the BIS "was a considerably smaller organization than other central banks, but barriers between departments were quite low and it operated horizontally." He added that "when domestic and global economies, finance, exchange rates and bonds are all intertwined as they are now, running an organization in silos is inappropriate."
The centerpiece of the reporting overhaul is a strategy meeting launched in August under the governor's direct supervision. The BOK created the forum, which brings together directors from nine related departments, to respond to international issues handled by committees under the BIS. Previously each department dealt individually with international discussions in its own field. Now major agenda items are shared and responses coordinated at meetings chaired by the governor. The aim is a joint response to issues that span multiple departments, such as central bank digital currency, tokenization and cross-border payments.
The change in committee structure is expected to affect how reports move up the chain. Under a structure in which a single deputy governor oversees as many as five departments and offices, information sharing between departments can be limited as reports pass through the deputy governor. The director-level panel under the governor appears intended to address that limitation by pooling information dispersed among deputy governors and allowing the governor to grasp and coordinate major issues directly.
Changes have also appeared in personnel. Choi Young-joo, deputy governor for international finance and cooperation, came from the post of director general of the financial markets department and rose to the international finance executive role without serving as director general of the international department. Choi, who joined the BOK in 1997, has worked in the financial markets department and the monetary policy department, and was named director general of the financial markets department in August. Because promotion to that deputy governor post had typically come after a stint as head of the international department, the appointment is read as placing weight on a broad understanding of financial markets and policy experience.
The appointment is also seen as an attempt to link international finance with domestic financial markets. An official familiar with the BOK said of Choi's selection: "It looks like the idea is to put someone who is market-friendly and understands markets into the international side to manage the domestic foreign exchange market." The reading is that for international finance work as well, practical understanding of domestic financial and currency markets is being valued over experience in the international department.
The appointment of the new financial markets department head also drew surprise. Lee Dae-gun, the incoming director general, has experience in the financial markets department but had not recently held a post there. Lee, who joined the BOK in 2000, has served in the financial markets, monetary policy and financial stability departments, and was named director general of the financial markets department just two months after moving to deputy director general of the financial services department in August. Following the international finance deputy governor post, the appointment marked another break from expectations at the director level.
An official familiar with the BOK said the appointments were a case of the governor putting his own personnel vision into practice, departing from established practice. Since taking office, Shin has emphasized tearing down barriers between departments and sharing information, and the same concerns are reflected in these appointments, the official said.
Inside the BOK, some expect the governor's discretion over personnel to grow as it becomes harder to predict promotions based solely on the sequence of key posts held. Another official familiar with the BOK said: "Until now, established personnel practices and personal networks carried considerable weight in appointments and management. These appointments can be seen as a move by the governor to set new personnel principles outside the existing structure."
Shin's approach to running the organization is seen as reflecting his time at the BIS. As head of the BIS monetary and economic department, he took part in building the Innovation Hub for cooperation among central banks and served as its interim head when it launched in 2019. Even though those roles did not involve personnel and management directly, he appears to be applying his experience designing and running frameworks for cross-organizational cooperation to the BOK's reporting and decision-making structure.
Shin also stressed inter-departmental cooperation and information sharing in a speech marking the central bank's 76th anniversary on June 12. "When each department cooperates closely and shares information so that everyone has the same understanding of the situation, the organization as a whole can make the most rational decisions," he said at the time.