Lee Eokwon, Chairman of the Financial Services Commission, pointed out that most of banks' household loans are concentrated in mortgage loans, which are considered to have a low risk of default, and emphasized the need for improvement to promote productive finance.
On December 19, during a presidential work report held at the Seoul Government Complex, Lee responded to President Lee Jaemyung's comment that "domestic financial institutions are mainly engaged in the easy business of lending money secured by land or houses and profiting from the interest," by making these remarks.
Lee stated, "Seventy percent of household loans from banks are mortgage loans, as they are the most convenient and have a low risk of default, which leads to a heavy concentration in this area. However, I question how much this actually benefits the Korean economy as a whole," adding that he plans to pursue institutional reforms.
President Lee remarked, "Bank funds should flow into the corporate and productive sectors, but isn't it the case that they are all being channeled into the private consumption sector? This needs to be corrected."
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