Kim Byung-hwan, Financial Services Commission Chairman, "Banks Have Room to Lower Interest Rates"

Kim Byung-hwan, Chairman of the Financial Services Commission (left), is attending the National Assembly's Political Affairs Committee on the 18th and responding to questions from Yoo Dong-soo, a member of the Democratic Party of Korea.

Kim Byung-hwan, Chairman of the Financial Services Commission, stated that domestic banks have room to lower interest rates on new loans and that this will be reviewed.

Chairman Kim made this remark on the 18th during a plenary session of the National Assembly's Political Affairs Committee, responding to Rep. Yoo Dong-soo of the Democratic Party of Korea, who pointed out that while the base interest rate is decreasing, banks' additional interest rates are actually rising.

Rep. Yoo criticized, "In a situation where the base interest rate is falling, the four major financial holding companies increased their interest rate spreads, resulting in a more than 10% increase in net profit last year," and questioned whether the financial authorities had failed to manage this properly.

In response, Chairman Kim said, "From July to August last year, household debt increased significantly, so the priority was to reduce the amount of debt through policy measures, and banks raised interest rates on new loans to respond to this. Afterwards, we issued guidelines to strengthen loan screening instead of responding by raising interest rates." He added, "We believe there is room to lower interest rates on new loans and will review this."

Lee Bok-hyun, Governor of the Financial Supervisory Service, also stated, "It takes some time for the effects of the base rate cut to reach the public," and added, "We are aware that high interest rates are causing significant difficulties for small business owners and companies, so future policies will take this into consideration."