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PARIS, May 29 (Yonhap) -- South Korea's finance minister Wednesday warned against the negative impact of the expansionary monetary policy adopted by advanced countries, saying that it could hurt not just them but also other emerging countries.
Hyun Oh-seok made the remarks in his prepared speech at a panel discussion of the Organization for Economic Cooperation and Development (OECD). He was joining the OECD Ministerial Council Meeting -- the organization's highest decision-making body -- scheduled for Wednesday and Thursday local time.
"Since the latest financial crisis, the major economies have adopted quantitative easing as a strategic policy to boost their own economy," Hyun said. "But now we must calmly think about the effect of the expansionary monetary policy."
"Competitive quantitative easing might hamper the macro-economic prudentiality of advanced countries themselves, not to mention that of emerging markets. It can eventually have negative impacts on the real economy as a whole," he noted.
He went on to say that an expansionary monetary policy "without structural reform" and the economic boom helped by such efforts alone are like "a fragile sandcastle on the beach."
"It does not guarantee sustainable growth ahead. Without fundamental changes, it is easily washed away by the waves of external shocks," the minister added.
He worried that the current capital liberalization system is not enough to tackle unintended consequences of quantitative easing, calling for efforts to "specifically" meet each country's financial needs to manage the capital flows under control.
"Only through structural reforms can we make economic growth sustainable and restore market confidence," he said.
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