Financial Supervisory Service Chief: "Delinquency Rate Manageable... Close Monitoring of Household Loan Growth"

Financial Situation Review Meeting Held on the 13th

Lee Bok-hyun, Governor of the Financial Supervisory Service, is attending the CEO meeting of foreign financial companies held at the Fairmont Hotel in Yeouido, Seoul on the 12th, delivering opening remarks. Photo by Dongju Yoon doso7@

On the morning of the 13th, the Financial Supervisory Service held a 'Financial Situation Review Meeting' chaired by Governor Lee Bok-hyun to examine domestic and international financial market trends and risk factors following the Financial Monetary Committee's decision to keep the base interest rate unchanged at 3.50%.

Governor Lee stated, "Although our financial market has recently shown signs of stability, global monetary tightening is expected to continue for some time, and uncertainties in the real economy remain. Therefore, we will proactively respond to risk factors in the second half of the year."

He added, "Concerns about delinquency rates have been raised, but recently, the delinquency rates of small and medium-sized financial companies serving low-income households have slowed significantly, and are assessed to be at a manageable level. However, considering market uncertainties in the second half, we will continue efforts to reduce delinquent loans through active sales and disposals, and manage capital and liquidity to ensure there are no problems even if market volatility expands."

He continued, "Household loans have increased (3.5 trillion won in June) due to recent special Bo-gum-ja-ri loans and recovery in housing transactions, but we are closely monitoring the increase in household loans such as mortgage loans to manage them stably."

Furthermore, he said, "Through PF creditor agreements and the Real Estate PF Normalization Support Fund, we will actively select and support PF projects that can be normalized, and at the same time, induce a soft landing of the real estate PF market by converting PF-ABCP to loans and selling non-performing loans."

Finally, he stated, "Since the possibility of a US interest rate hike in July may put upward pressure on domestic market interest rates, we will activate win-win finance for low-income and vulnerable borrowers, and by assessing each borrower's repayment ability, prepare customized debt adjustment plans to ensure a smooth transition of debt repayment deferral measures."