Lee Okwon: "Real Estate Overheating Must Be Curbed... Additional Regulations If Needed" (Comprehensive) [2025 National Audit]

"Preventing Overheating in the Real Estate Market Is the Way to Ensure the Housing Ladder for Ordinary Citizens"
Lee Okwon, Chairman of the Financial Services Commission, at the National Assembly Political Affairs Committee Audit

Lee Okwon, Chairman of the Financial Services Commission, adjusts his glasses during the National Assembly's Public Administration and Security Committee's audit of the Financial Services Commission on October 20, 2025. Photo by Kim Hyunmin

Lee Okwon, Chairman of the Financial Services Commission, stated, "Quickly curbing the overheating of the real estate market is essential to ensuring the housing ladder for ordinary citizens in the long term."

At the National Assembly's Political Affairs Committee audit on the 20th, Chairman Lee responded to opposition lawmakers' criticism that, following the October 15 real estate measures, "only those with substantial cash reserves can now buy homes." He said, "The housing ladder issue has been our primary concern."

However, he emphasized, "Supporting home purchases through loans does not ensure housing stability and also stimulates instability in the real estate market. We must quickly stabilize demand, and of course, additional supply measures are also necessary."

When asked whether a policy focused solely on regulation could control real estate prices, he explained, "The current measures have been introduced in response to market conditions." He added, "The June 27 measures focused on loan regulations, the September 7 measures on supply, and the October 15 measures primarily on transaction restrictions, with the designation of land transaction permit zones being the most significant."

He further stated, "We will closely monitor market conditions and promptly implement additional prepared measures if necessary."

Chairman Lee also said the commission is considering raising the minimum risk weight (RWA) for banks' mortgage loans to further stabilize housing prices. In response to Democratic Party lawmaker Yoo Dongsoo's question about whether the RWA floor for mortgage loans should be raised from 20% to 25%, he said, "We have already moved up the implementation from the second quarter of next year to January, and will review the matter comprehensively again."

Regarding Assemblyman Yoo's suggestion to introduce blanket collateral loans, as implemented in the United States and the United Kingdom, and to reintroduce movable asset-backed loans for productive finance, Chairman Lee replied, "Relying on debt is not sustainable, so we will pay special attention to transitioning to productive finance."

Chairman Lee also addressed Democratic Party lawmaker Lee Inyoung's point that corporate retained earnings have grown faster than wage increases or GDP over the past decade, saying, "Companies should use the funds they already have." When Assemblyman Lee added, "If excessive retained earnings are left unchecked, only the financial market will be activated, and if the real economy is not healthy, it is not sustainable," Chairman Lee responded, "Understood."

Regarding the relaxation of the separation of banking and commerce regulations, he expressed an open attitude, saying, "We will seek practical solutions." He explained, "As we face an era of investment wars and the need for large-scale investments, there are calls to rationalize and improve the separation of banking and commerce regulations. While maintaining the basic principles of the system, we are considering how to address immediate issues in a practical way."

He further analyzed, "A key challenge will be how to practically resolve the restrictions in the Fair Trade Act that prevent general holding companies from entering the financial sector."

Regarding financial sanctions against groups such as the 'Prince Group,' which has been identified as being behind criminal organizations in Cambodia, he said, "We are in discussions with the Ministry of Foreign Affairs and the Ministry of Economy and Finance," and added, "We will conclude consultations swiftly and designate those subject to financial transaction restrictions."

Chairman Lee also announced plans to submit the "Phase 2 Virtual Asset Bill," which includes regulations on stablecoins, to the National Assembly within the year. He said, "Since we are in the early stages of designing the system, we are carefully reviewing it with relevant ministries to ensure sufficient safeguards," adding, "We are in the final stages of coordination."

He continued, "Stablecoins could be further utilized, as they can be linked to overseas demand in areas such as virtual asset trading, payments, and remittances, so we are considering ways to expand their use." The payment of interest on stablecoins will, in principle, not be allowed. The United States' Genius Act prohibits interest payments on stablecoins used for payments, and Korea intends to adopt the same principle.