Lee Bok-hyun "Closely Communicating with BOK on Monetary and Financial Policies"

"High Interest Rates Increase Burden on Businesses and Households"
"Balance Needed in the Process of Price Stabilization"

[Image source=Yonhap News]

Lee Bok-hyun, Governor of the Financial Supervisory Service, drew a line regarding criticisms that the financial authorities' fine-tuning of interest rates diminishes the effectiveness of monetary policy, stating, “We are exchanging views on monetary and financial policies with the heads of financial authorities.”

After the 'Policy Forum on the Activation of Non-face-to-face Biometric Authentication' held on the 12th at the Bankers' Hall in Jung-gu, Seoul, Governor Lee told reporters, “It is a misunderstanding that financial authorities' policies were implemented from different positions.” This was a rebuttal to rumors that Lee Chang-yong, Governor of the Bank of Korea, expressed discomfort over the financial authorities' interest rate interventions.

Governor Lee also emphasized the heavy burden on companies and households due to the sustained high interest rates. He diagnosed, “Companies are still bearing a heavy burden as they raise funds at high interest rates under poor loan conditions from financial institutions. Although the burden on households has recently eased somewhat due to the banking sector's efforts for win-win financing, households still face more than double the interest burden compared to before the interest rate hike period.”

He added, “If the scale of households falling into default due to excessive household restructuring during the price stabilization process increases too rapidly, it could cause not only financial market instability but also social unrest. We are implementing policies while maintaining balance, and in that process, we are communicating closely with the Bank of Korea.”