[2025 Audit] Lee Okwon: "Will Reconsider Raising the Minimum RWA for Mortgage Loans"

As the financial authorities announced a plan to raise the minimum risk weight (RWA) for mortgage loans from 15% to 20%, Lee Okwon, Chairman of the Financial Services Commission, stated that he would reconsider the increase ahead of its implementation next year.

At the National Assembly's Political Affairs Committee audit on the afternoon of October 20, Lee responded to a question from Yoo Dongsoo, a lawmaker from the Democratic Party of Korea, who asked whether the minimum RWA for mortgage loans should be raised further from 20% to 25%. Lee said, "We have moved the implementation date for the increase forward from the second quarter of next year to January, but I will review the matter again overall."

Lee Okwon, Chairman of the Financial Services Commission, is taking an oath at the National Assembly's Political Affairs Committee during the audit of the Financial Services Commission and others on October 20, 2025. Photo by Kim Hyunmin

In response to Assemblyman Yoo's suggestion to introduce blanket collateral loans and reintroduce movable asset-backed loans, as practiced in the United States and the United Kingdom for productive finance, Lee said, "Relying on debt is not sustainable, so I will pay special attention to promoting a shift toward productive finance."

Meanwhile, when Assemblyman Lee Inyoung from the Democratic Party of Korea pointed out that the growth rate of corporate retained earnings over the past ten years has outpaced both wage growth and the gross domestic product (GDP) growth rate, Chairman Lee said, "Companies should start by using the funds they have." When Assemblyman Lee further commented that leaving the excessive accumulation of retained earnings unaddressed would only stimulate the financial market and undermine the health of the real economy, making sustainability impossible, Chairman Lee replied, "I understand."