The Bank Of Korea And The European Central Bank Essay

1232 Words Mar 19th, 2016 5 Pages
Central banks exist in nearly every country and the purpose is to control and manage the

monetary base and currency of their respective countries. Although their mission is the same,

their structure may vary. The Bank of Korea in South Korea can be examined by looking at these

similarities and differences.

The Bank of Korea (BOK) has goals and responsibilities that are similar to that of the

Federal Reserve and the European Central Bank (ECB). The Bank of Korea was established in

1950 with the primary functions of maintaining price stability, establishing monetary policies

and controlling money circulation. Similarly, the goals of the Fed and ECB are to control the

country’s monetary policies in order to maximize the conditions of their economy in things such

as employment, interest rates, and prices. The BOK is not a commercial bank, similar to the Fed.

The Monetary Policy Board is at the head of this organization and is “composed of seven

members representing various groups in the national economy” (“Monetary Policy Board”). The

board consists of a Chairman or Governor, a senior deputy governor, and members who are

nominated by representatives from the national economy. For example, the Minister of Strategy

and Finance could nominate a member of the board. The President appoints the members on the

board, who all hold three-year terms, with the exception of the Chairman who holds a four-year

term position (“Monetary Policy Board”). In…

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