Dokyu-sang "Concerns Over Rising Household Loan Interest Burden... Strengthening Risk Monitoring" (Update)

Extension of Application Deadline for 'Period Industry Stabilization Fund' Scheduled for Late April

Do Gyu-sang, Vice Chairman of the Financial Services Commission Photo by Yonhap News

[Asia Economy Reporter Kwangho Lee] Do Kyusang, Vice Chairman of the Financial Services Commission, said on the 9th, "If global interest rate hikes and synchronization with domestic interest rates occur, risks such as increased corporate financing costs and increased interest burdens on household loans may arise."

Vice Chairman Do stated at the Financial Risk Response Team meeting held at the Government Seoul Office that "signs of rising interest rates, such as expected inflation and government bond yields, are appearing, so monitoring is necessary."

He emphasized, "We will closely monitor financial market risk factors by sector and prepare to respond promptly when necessary."

Regarding COVID-19 financial support, Vice Chairman Do said, "Supporting our companies to proactively respond to environmental changes after COVID-19 is also a major task of this year's COVID-19 financial support," adding, "First, we plan to extend the application deadline for the Period Industry Stabilization Fund, which is scheduled to expire at the end of April this year, and review whether there are ways for the fund to help companies rebound after COVID-19."

On the status and inspection plan for conditional disposal mortgage loans, he explained, "Considering the development of COVID-19 and trends in the real economy, necessary support will continue, but the quantitative and qualitative levels of debt will be managed in an orderly manner," adding, "In particular, to block speculative housing purchase demand, in regulated areas, when purchasing a new house with a mortgage loan, an agreement must be signed to dispose of the existing house within a certain period (for one-house owners) and move into the new house."

He continued, "The expiration of the disposal agreement period is expected to begin in earnest from the first half of this year," and urged, "The Financial Supervisory Service should conduct thorough inspections to check for any violations of the agreement, and the banking sector should promptly take necessary measures such as loan recovery if non-compliance is confirmed."