Eun Sung-soo, Financial Services Commission Chairman, "No Regulation on Low-Income with DSR... Considering Targeted Regulation"

"Concerns Over Curbing Real Estate Speculative Funds Without Harming Ordinary Citizens and General Demand"

Financial Services Commission Chairman Eun Sung-soo is taking a commemorative photo with actress Go So-young and singer Jung Yun-ho (U-Know Yunho) at the 5th Financial Day ceremony held on the 27th at the 63 Convention Center in Yeouido, Seoul.

[Asia Economy Reporter Kangwook Cho] Eun Sung-soo, Chairman of the Financial Services Commission, stated that there is no intention to impose total debt service ratio (DSR) regulations on ordinary citizens. However, he revealed that 'pinpoint' regulations are being pursued to curb real estate speculation funds.

Chairman Eun met with reporters after attending the Financial Day ceremony held on the 27th at the 63 Convention Center in Yeouido, Seoul, and said, "I fully support using the system called DSR. However, we are internally discussing when and to what extent it should be implemented."

He drew a clear line by saying, "I understand the need to reduce household debt, but since small business owners are facing difficulties, ultimately, there is no intention to regulate ordinary citizens or general public in their daily lives."

Chairman Eun explained, "Money does not have a tag, so you cannot tell whether the loan amount is going toward living expenses or real estate. Therefore, we are trying to apply such regulations in a limited, pinpoint manner, but at the final stage, there is an exchange of opinions on whether this is pinpoint or comprehensive."

As measures to strengthen DSR regulations, there are proposals to lower the DSR ratio from 40% to 30% for new mortgage loans secured by houses priced over 900 million KRW in speculative areas and speculative overheating districts, as well as lowering the price criteria for regulated houses and expanding the applicable areas.

Chairman Eun mentioned these three measures and said, "We are trying various approaches, considering which method can prevent speculative funds from going into home purchases without harming ordinary citizens and general demand."

However, he stated that no specific measures or implementation timelines have been decided yet.

Chairman Eun added, "(The implementation timing) has not been decided yet," and "It will not be retroactive."

Regarding the independence of the Financial Supervisory Service (FSS) at the National Assembly audit, Chairman Eun said, "The FSS is already performing its duties neutrally and independently," and "No institution independently decides its budget or personnel; all are subject to democratic control."

He emphasized, "Currently, the Financial Services Commission and the FSS must cooperate well to manage the novel coronavirus disease (COVID-19) crisis and strive to become a good supervisory organization."

Regarding the Interest Rate Restriction Act, Chairman Eun said, "Since the base interest rate has dropped, lowering the maximum interest rate is the right direction," and "We are reviewing the bill submitted to the National Assembly."

Meanwhile, Yoon Seok-heon, Governor of the FSS, briefly responded that the reform plan related to the independence of the FSS "has not been submitted yet."