Hawkish FSC chief and BOK head agree to cooperate on containing household debt

2021.09.03 13:08:37 | 2021.09.03 13:09:23

Bank of Korea Governor Lee Ju-yeol (left) and Financial Services Commission Chairman Koh Seung-beom [Photo by Yonhap]이미지 확대

Bank of Korea Governor Lee Ju-yeol (left) and Financial Services Commission Chairman Koh Seung-beom [Photo by Yonhap]

Bank of Korea Governor Lee Ju-yeol and Financial Services Commission (FSC) chairman Koh Seung-beom on Friday agreed to “mutually keep pace” and “closely cooperate” in monetary and financial policy maneuvering, particularly to ease financial imbalances from surging household debt.

Their meeting comes after the former hawkish member of the monetary board until recently has been recruited as the government’s financial policy chief and the central bank has shifted to monetary tightening in the face of inflationary and household buildup. In the last monetary policy meeting, the BOK lifted the base rate by a quarter of a percentage point from the record low of 0.50 percent and hinted another hike in near future.

Lee noted that danger from financial imbalances can surface due to capital concentration in the capital market and unfazed growth in household debt.

“If the circumstances are left unattended, the stability of the financial market and economy would be at risk,” Lee said, arguing for an “appropriate” mix of monetary and macroeconomic policy to address the problem.

“The show of cooperation” itself could draw confidence from the market, Koh was quoted as saying who stressed on “close” cooperation between the two agencies and requested regular meetings between the financial and monetary chiefs.

By Choi Mira

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