A sense of disappointment is spreading within the Bank of Korea (BOK) after Governor Shin Hyun-song's anticipated succession to the chairmanship of the Bank for International Settlements (BIS) Committee on the Global Financial System (CGFS) fell through. Internal discussions on organizational realignment had reportedly been underway on the assumption of the succession.
According to financial industry sources on Thursday, the BIS announced the previous day that it had appointed Bank of Japan (BOJ) Governor Kazuo Ueda as the next CGFS chair. Ueda will begin a three-year term as chair starting Thursday, succeeding former BOK Governor Rhee Chang-yong.
The CGFS is one of the core policy consultative bodies under the BIS. It is a central bank governor-level forum that discusses structural changes in global financial markets, dollar liquidity, capital flows and financial stability issues. As a central venue for discussions on the global financial order, the chairmanship carries considerable symbolic weight and influence.
Rhee was selected as CGFS chair in 2023, becoming both the first BOK governor and the first central bank governor from a non-reserve-currency country to hold the position. His appointment was seen as elevating the BOK's standing on the international stage. Since then, both inside and outside the BOK, the possibility had been raised that Shin, a BIS veteran, would naturally succeed to the next chairmanship.
In fact, within the BOK's international cooperation division, organizational plans had reportedly been discussed on the premise of the CGFS chairmanship succession.
"The governor had mentioned reviving the agenda research team and realigning the international cooperation organization, so internally there was an atmosphere of significant preparation assuming the possibility," a BOK official said. "In effect, discussions had proceeded on the premise of succession."
However, analysts say the BOJ's proactive moves served as the decisive variable behind the failed succession. The BOJ has been a core member of the BIS since its founding and wields considerable influence within the international financial network, while Ueda was also regarded as a strong competing candidate.
"The BOJ has served as CGFS chair in the past and has traditionally strong influence within the BIS," another BOK official said. "While it has been relatively quiet on the international stage, there is a growing sense that it is now actively expanding its presence."
"Rather than being an issue of former chair Rhee Chang-yong's performance, it is likely that regional balance and political equilibrium unique to international organizations, as well as the presence of a strong competitor in Japan, played a larger role," the official added.
Still, the prevailing view within and outside the BOK is that Shin's international standing itself will not change significantly. Shin, a BIS insider, retains strong influence within the global central bank network, and there is also speculation that he may take on roles in other key committees or international discussion channels.
"The CGFS chairmanship is a highly symbolic position, but it is difficult to say that Governor Shin's international influence itself has weakened," a senior financial industry official said. "Rather, the BOK's presence is likely to continue growing on core BIS agenda items such as stablecoins and global dollar liquidity."
