Korean fiscal, monetary, and financial authorities vow to contain household debt

2022.01.04 14:23:46

(From left) Financial Services Commission Chairman Koh Seung-beom, Finance Minister Hong Nam-ki, Bank of Korea Governor Lee Ju-yeol and Financial Supervisory Service Governor Jeong Eun-bo pose for a photo during the meeting on macroeconomic, financial affairs on Sept. 30, 2021. [Source: Pool Photo]이미지 확대

(From left) Financial Services Commission Chairman Koh Seung-beom, Finance Minister Hong Nam-ki, Bank of Korea Governor Lee Ju-yeol and Financial Supervisory Service Governor Jeong Eun-bo pose for a photo during the meeting on macroeconomic, financial affairs on Sept. 30, 2021. [Source: Pool Photo]

Containment in household debt became the common goals of South Korea fiscal, monetary, and financial authorities in the new year as the private-sector debt has come to more than double the gross domestic product.

Bank of Korea Governor Lee Ju-yeol warned of the credit risk from excessive borrowing by individuals and self-employed amid normalization in the loose monetary policy.

The financial system could weaken coupled with external uncertainties, Lee said, vowing to take pre-emptive actions for the potential dangers. His comment is another signal for rate increases.

Koh Seung-beom, chairman of the Financial Services Commission, promised of strong management on household debt to ensure stability in the financial system.

“Preemptive supervision to fend off potential risk” was the primary goal for this year, said Financial Supervisory Service Governor Jeong Eun-bo.

Major policy direction will be focused on improving system to protect financial consumers and improve financial industry competitiveness.

Deputy prime minister doubling as the minister for economy and finance Hong Nam-ki vowed policy priority to contain household debt rise at 4 to 5 percent and liquidity risk.

By Lee Eun-joo

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