Lee Chang-yong "LTV Relaxation Should Be Gradually Implemented Considering Macroeconomic Impact"

Written Response of the Candidate for the Governor of the Bank of Korea

[Asia Economy Reporter Seo So-jeong] Lee Chang-yong, the nominee for Governor of the Bank of Korea, expressed concerns that an expansion of micro-level loan easing policies could accelerate the increase in household debt, potentially causing adverse effects on price and financial stability.

On the 14th, Lee submitted this response to a written inquiry from Go Yong-jin, a member of the National Assembly's Planning and Finance Committee from the Democratic Party of Korea, who asked about his stance on the relaxation of the Loan-to-Value (LTV) ratio.

He stated, "The LTV adjustment reportedly being pursued by the Presidential Transition Committee is a micro-level supplementary measure targeting first-time homebuyers, and I believe it has significance in protecting actual demand. However, I think the LTV relaxation measures need to be implemented gradually, considering both their original intent and the macroeconomic impact."

President-elect Yoon Seok-yeol announced during the presidential election campaign a pledge to raise the LTV cap to 80% for first-time homebuyer households to expand opportunities for youth and newlyweds to own homes. For households other than first-time homebuyers, the LTV cap was to be unified at 70% regardless of region.