Lee Bok-hyun Vows Thorough Assessment of Base Rate Cut Impact
Will Monitor Household Loan Concentration and Spread Trends
On the morning of the 25th, Lee Bok-hyun, Governor of the Financial Supervisory Service, held a financial situation review meeting at the headquarters in Yeouido, Seoul, following the Bank of Korea's base rate cut. He stated that they would closely analyze the impact of the base rate reduction on household and corporate loan interest rates and work to prevent the concentration of household loans. Provided by the Financial Supervisory Service
Lee Bok-hyun, Governor of the Financial Supervisory Service, announced that he will closely analyze the impact of the base interest rate cut on household and corporate loan interest rates and monitor the concentration of household loans.
On the morning of the 25th, after the Bank of Korea lowered the base interest rate, Governor Lee held a financial situation review meeting at the headquarters in Yeouido, Seoul, stating, "We will monitor trends in bank sector spread rates to prevent the concentration of household loans." On the same day, the Bank of Korea's Monetary Policy Committee cut the base interest rate by 0.25 percentage points from 3.00% to 2.75% per annum.
Governor Lee said, "We will closely analyze the effects of the base interest rate cuts, which have been lowered three times since last October, on household and corporate loan interest rates by monitoring trends in bank sector spread rates. We will also guide stable management to prevent the concentration of household loans, which could arise from the recent real estate recovery in some areas of Seoul and moving season purchase demand coinciding with expectations of interest rate cuts."
He emphasized, "We will strengthen monitoring of asset-liability management (ALM) practices to ensure that the duration gap between assets and liabilities of insurance companies does not excessively widen due to the decline in market interest rates. We will also devise risk assessments and support measures focusing on industries at high risk of facing an unfavorable external environment due to changes in Trump's trade policies."
He continued, "We will thoroughly supervise the disposal of non-performing assets and capital expansion of small and medium financial companies, and provide close guidance through management evaluations and on-site inspections for underperforming companies. Additionally, we will meticulously prepare to ensure the early stabilization of market infrastructure innovations such as the resumption of short selling and the launch of alternative trading systems (ATS), and faithfully implement tasks to improve the domestic capital market investment environment."
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