Strict Response to IBK Unfair Loans...
Both Commercial and Policy Banks Take the Issue Seriously
Monitoring Household Loans in Q2...
All Possible Measures Being Prepared
Considering Equity-type Support Policy for Home Purchases
"MG Insurance Will Be Handled According to Law and Principles...
Fair Screening Is Important for Woori Financial"
Recognizing the Good Intentions of the Commercial Act Amendment but Concerned About Side Effects...
"Capital Market Act Amendment Should Come First"
Kim Byung-hwan, Chairman of the Financial Services Commission, is attending the regular press briefing held at the Government Seoul Office in Jongno, Seoul on the 26th, answering questions from the press. 2025.3.26 Photo by Jo Yong-jun
Kim Byung-hwan, Chairman of the Financial Services Commission, stated regarding the IBK unfair loans, "I understand that necessary sanctions or investigations are underway according to the inspection results," adding, "It is necessary to respond strictly accordingly."
At the March monthly press briefing held at the Gwanghwamun Government Seoul Office, Chairman Kim said, "Both commercial banks and policy financial institutions are taking this incident very seriously."
Regarding the recent series of unfair loan incidents in the banking sector, Chairman Kim pointed out, "There are common cases of unfair and illegal loans related to relatives and retirees."
He said, "Since the accountability structure is still being implemented and settled, there may be parts that need to be re-examined," adding, "Specifically, there should be more focused management and internal control regarding relatives and retirees among bank executives and employees."
Monitoring Household Loans in Q2... Preparing All Possible Measures
Minister of Land, Infrastructure and Transport Park Sang-woo and Seoul Mayor Oh Se-hoon are attending a joint briefing on housing market stabilization measures related to real estate regulations, finance, and speculative transactions at the Government Seoul Office in Jongno-gu, Seoul on the 19th. 2025.3.19 Photo by Jo Yong-jun
Chairman Kim expected the increase in household loans in March to be smaller than in February. As the real estate market stirred due to the lifting and re-regulation of the land transaction permit system in Seoul, the Financial Services Commission announced regulatory measures together with the Ministry of Land, Infrastructure and Transport and the Seoul Metropolitan Government.
He emphasized, "As of March 20, the numbers show a noticeably smaller increase compared to February," adding, "Since it takes 1 to 2 months from signing a house contract to loan approval, we are closely monitoring the household loan situation without letting our guard down."
Chairman Kim said, "Household loans surged significantly in Q2 last year, but this year we will manage them monthly and quarterly," and added, "If this works, we expect the loan scale not to spike significantly."
He further stated, "If the situation in Q2 changes and loans increase significantly, we will put all possible measures on the table and take appropriate actions according to the situation," hinting at other regulations being prepared.
In particular, he spent considerable time explaining criticisms about inconsistent household loan policies. He said, "Criticism of 'flip-flopping' policies is valid when there is only one control variable or objective function," but explained, "We have to manage household debt during a period of base rate cuts."
He pointed out, "Our situation involves two objectives: managing the household loan growth rate at an appropriate level from a macroprudential perspective and reflecting the widening gap between loan interest rates and the base rate during the base rate cut period."
He continued, "The way to achieve these goals is ultimately through bank screening," adding, "There is a method to individually reduce personal loan limits through screening, and a method to filter out real estate speculative demand and supply loans first to those in need."
Considering Equity-type Support Policy for Home Purchases
Kim Byung-hwan, Chairman of the Financial Services Commission, is attending the regular press briefing held at the Government Seoul Office in Jongno, Seoul on the 26th. 2025.3.26 Photo by Jo Yong-jun
Chairman Kim revealed that they are reviewing ways to provide support in an equity-type manner related to household loan policies.
He explained, "House prices keep rising, and as the Debt Service Ratio (DSR) and others are gradually strengthened, those who do not hold much cash will face increasing restrictions in purchasing homes," adding, "Raising loans could also pose problems from a macroprudential perspective."
Equity-type housing finance is expected to take the form where the policy financial institution, Korea Housing Finance Corporation, participates as an equity investor when purchasing a home, thereby reducing the debt burden of the homebuyer. The Financial Services Commission plans to proceed through consultations with related ministries and pilot projects.
"MG Insurance Handled According to Law and Principles... Fair Screening Important for Woori Financial"
Regarding the sale of MG Insurance, Chairman Kim reiterated, "We will handle it according to law and principles." With Meritz Fire & Marine Insurance withdrawing from acquiring MG Insurance, liquidation possibilities are also being discussed.
Chairman Kim explained, "We have principles to establish a sound market order, protect insurance policyholders, and stabilize the financial market, but the options have become very limited," adding, "We will carefully examine the most desirable and feasible options and present a handling plan within a reasonable time."
Regarding Woori Financial Group's insurance company acquisition screening, he said, "The Financial Services Commission will conduct the screening according to established procedures," and added, "Ensuring fairness in screening is more important than the schedule." He also mentioned, "The Financial Services Commission's screening subcommittee conducts the initial screening, and we will try not to prolong that period unnecessarily."
Recognizing the Good Intentions of the Commercial Act Amendment but Concerned About Side Effects... 'Capital Market Act Amendment Should Come First'
Chairman Kim expressed opposition regarding the 'Commercial Act amendment' following Financial Supervisory Service Governor Lee Bok-hyun's radio broadcast earlier that morning.
He said, "I fundamentally feel a strong will regarding the need for governance and protection of general shareholders," but added, "Although the Commercial Act amendment has good intentions, considering whether it can be achieved and whether there are side effects, I hope the Capital Market Act amendment comes first."
Earlier, Governor Lee said, "On April 2, mutual tariff issues will arise, and there may be political instability in early April," adding, "If a veto is exercised at such an important time, the government's will to protect shareholder value will be doubted, which could affect the stock and foreign exchange markets."
He continued, "I have taken the position that changing the Commercial Act to align with international standards is principled, but I have also pointed out the need to amend the Capital Market Act considering large corporations," adding, "Now, it is not about which law is better, but about making a judgment given that the law has already passed."
The deadline for handling the re-request for the Commercial Act amendment is until the 5th of next month. Regarding whether to exercise the veto, Chairman Kim said, "The Ministry of Justice, the competent department, will have the primary opinion, and the Acting President will make the final decision."
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