“Adjusting elasticity according to economic conditions” revealed
Reinforcement of support for ordinary people, such as expansion of policy finance
Koh Seung-beom, Chairman of the Financial Services Commission. yunhap news
Koh Seung-beom, chairman of the Financial Services Commission, once again emphasized the position that severing the link between snowballing household debt and the overheated asset market is the top priority for financial stability. In the process of strengthening the management of the total amount of household debt, circumstances such as interest rate hikes and damage to end users of loans are occurring, but it is more urgent to prevent the spread of financial risks. However, in the future, it was decided to make adjustments more flexibly in consideration of the real economy and financial market trends, while strengthening the financial policy for the working class.
At a press conference held on the 3rd, Chairman Koh said, “For the time being, we will continue to manage the total amount of household debt, but next year, systematic management such as the DSR (Total Debt Repayment Ratio) regulation will be implemented next year, so more flexible management will be possible than this year. ” he said.
Picking the soft landing of household debt as the biggest issue since taking office, he evaluated that the increase in household debt has slowed since August and the real estate market is also looking for stability. According to the Financial Services Commission, household loans from all financial sectors increased by 5.9 trillion won during the month of last month, and has been steadily declining since July (15.3 trillion won). The growth rate of household loans also peaked at 10% in July and then recorded 7.7% in November, the FSC predicted.
On the other hand, the voices of inconvenience from end users, such as the rise in jeonse and loan interest rates, have grown. In response, Chairman Koh said, “Strengthening the management of household debt is not popular and an easy road right now, but it had to be pushed forward decisively to turn the soaring trend. “He said.
Regarding concerns that Japan could follow the path of Japan’s ‘lost 20 years’ in the phase of increasing volatility, “In the case of Japan, after a long-term low interest rate policy, the situation, such as falling asset prices and weakening purchasing power, has shifted to industrial and household insolvency due to rapid interest rate hikes. It was the beginning of the lost 20 years that caused a vicious cycle of insolvency. He added, “In order to prevent further bubbles from becoming like Japan, I think that efforts to block areas that are likely to cause financial imbalances should continue in the future.”
Chairman Ko also presented a plan to strengthen financial support for the underprivileged. He explained, “Next year, we will expand the target of supplying low-income financial institutions to 10 trillion won. In addition, the government plans to continue supplying policy mortgages such as the Bogeumjari Loan Program for the common people, and expand housing mortgage loans with upper interest rates.
Meanwhile, according to the financial industry, major commercial banks have recently submitted to the Financial Supervisory Service a 4.5 to 5 percent target for managing household loan growth for next year. Some commercial banks, which had a relatively high growth rate of household loan growth this year, presented their next year’s target in line with the average level (4.5%) suggested by the authorities, and banks that judged that the growth rate was not high this year wrote a target of about 5%. An official from a commercial bank explained, “The fact that the target for the growth rate of household loans in the banking sector for next year is 0.5 percentage points lower than this year means that the bank’s household loan capacity next year is highly likely to decrease compared to this year.”
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