SEOUL, March 22 — South Korean economist Shin Hyun-song, best known for predicting the 2008 Global Financial Crisis, was named today to head the central bank, facing inflation risk from the Iran war and uneven growth in Asia’s fourth-largest economy.

President Lee Jae Myung chose Shin, head of the economic department at the Bank for International Settlements, dubbed the central bank for the world’s central banks, to replace Bank of Korea Governor Rhee Chang-yong when his term ends on April 20.

“As seen in the recent Middle East situation, domestic and global economic conditions are not separate from each other, which will make his expertise stand out even more,” a spokesperson at the presidential Blue House told a briefing on Sunday.

“There is a possibility of consumer prices rising due to the Middle East situation, so it is important to control inflation. That also needs to be in harmony with domestic economic growth, and he is judged to be the ⁠most suitable person in that respect,” the spokesperson ⁠said.

Shin, 66, faces a confirmation hearing in the ⁠National Assembly, but lawmakers do not have ⁠a veto over ⁠the president’s nomination.

He will face a delicate balancing act between supporting growth and containing financial stability risks stemming from surging household debt, as well as inflation pressure from the US-Israeli war ⁠on Iran, now in its fourth week.

Although South Korea’s high-tech sectors, including semiconductors, are thriving, economic recovery remains uneven as traditional sectors, such as steel and petrochemicals, struggle due to weak external demand.

“If it’s a supply shock, and certainly if it’s a temporary one, these are the textbook examples where you should look through and not react ⁠with monetary policy,” Shin said in a report last week. “It really depends on how long the conflict lasts and how long the rise in the oil ⁠price will be sustained.”

Shin and Raghuram Rajan presented warnings at a US Federal Reserve conference in August ⁠2005, ⁠drawing a metaphor from the London Millennium Bridge to identify systemic vulnerabilities that would eventually trigger the global financial crisis.

Shin, a former Princeton University professor, is known to have close ties with many BOK officials including Rhee, having been a regular panellist at the bank’s symposiums.

The governor can be reappointed for a four-year term once. — Reuters