[Viewpoint] Character is key for bank presidents

“Noble character and outstanding experience in finance” used to be the requisite qualifications to become the president of the Bank of Korea, according to Article 23 of the old regulations governing the nation’s central bank. Although the clause no longer exists, the spirit still lives.

These qualifications are used to disqualify some candidates. Critics say one has this flaw while another has that flaw. In such a time, the media cannot step up and say who should be the next president of the Bank of Korea. What the media can do is limited to pointing out that a person with certain character flaws should not be appointed.

The most dangerous kind of candidate is one who seeks to use the position as a stepping stone for the next post. These people dream of becoming a minister, prime minister or sometimes an even higher post after heading the Bank of Korea. Yet, a Bank of Korea president must sometimes publicly oppose the government. When one’s dreams are too large, ambition can keep one from the middle ground.

Candidates who are determined to have the post no matter what are also dangerous. They often do not have a vision of how to perform once they take office.

Those who are obsessed with the independence of the central bank are also a problem. They say they will sacrifice everything to protect the Bank of Korea’s independence.

The central bank, however, is not a battlefield. The bank needs to communicate not only with the government but also with other important financial sectors to coordinate the market. The “independence fighters” may earn high praise from the bank’s members, but they do nothing to ease the concerns of other voices in the economy.

Then there are those who want to make the appointment the finishing touch on a long career spent in trophy positions within the government. Such a candidate could bring valuable career expertise to the presidency of the bank.

However, experience and knowledge should be evaluated by the market first and naturally lead to the appointment.

Filtering out inappropriate candidates is and should be the job of the person who has the authority over the appointment. The confirmation hearing by the National Assembly, which has become a new trend, cannot be trusted 100 percent.

Everyone agrees that the proper candidate should be appointed through a confirmation hearing, but there is one element missing: the certainty that the National Assembly has the real ability to confirm an appointment. Lawmakers are experts at picking out the flaws in others. Some even say that Admiral Yi Sun-sin of Joseon Dynasty would have had a hard time surviving the National Assembly’s confirmation hearings.

Critics also say that those pushing for a confirmation hearing are probably seeking to use it to back a specific candidate. If that happens, a “confirmation hearing-friendly” candidate could be appointed to the bank presidency even if there are more important issues to be considered, or better candidates. If the appointment is made based on political logic alone, the candidate may never be able to work with driving power and public trust.

The next president of the Bank of Korea needs to consider many issues. He or she must coordinate closely with the government. The government has more power to decide the timing and method of an exit strategy.

Coordination with central banks abroad is another key. The Bank of Korea cannot act alone.

More importantly, the bank must have a deep consideration for the economic welfare of the Korean people. Personal debts have snowballed, and hiking the interest rate won’t be welcomed. Yet keeping the rate low will likely trigger inflation, and the Bank of Korea will solely be responsible for the aftermath. And in the end, the central bank will be accountable for asking the people to submit to its painful decisions.

It’s a difficult choice.

Highly developed political capabilities and the ability to handle such sensitive issues are, therefore, crucial in the Bank of Korea president. The ability to persuade the major participants of the economy, the capability to engage others, the tactics and strategies to achieve a goal, the boldness to make a quick decision, the power to break through resistance and opposition, the courage to endure attacks and criticism and the spirit to fight when necessary are the qualities the Bank of Korea president must have. On top of that, charisma is crucial.

The “noble character” of the Bank of Korea’s president can shine based on such real qualities. This is different from the “nobility” that is often considered far from the secular world.

This is why the Bank of Korea president is an extremely difficult position to fill, and to sit in. The persons both appointing and seeking appointment are urged to contemplate very deeply.

*The writer is the business news editor of the JoongAng Ilbo.

by Nahm Yoon-ho