Work Report to the Political Affairs Committee
On the 5th, Financial Services Commission Chairman Lee Eogwon stated that he would consider raising banks' risk-weighted assets (RWA) for mortgage loans to 25% as part of efforts to redirect funds concentrated in real estate toward more productive sectors.
Lee Eokwon, chairman of the Financial Services Commission, is adjusting his glasses while attending the plenary meeting of the Standing Committee on Political Affairs at the National Assembly on Feb. 5, 2026. Photo by Kim Hyunmin
At a work report session of the National Assembly Political Affairs Committee that day, Chairman Lee said, "We will make it disadvantageous for funds to flow into real estate."
He explained, "We implemented an increase in the RWA for mortgage loans from 15% to 20% starting January 1," adding, "We will continue to review an additional increase to as high as 25%."
If the RWA floor is raised, banks' capacity to extend mortgage loans will shrink, leading to a reduction in the supply of household loans.
Chairman Lee also said, "As the capital market becomes more active, funds are moving into productive finance, and as we are curbing household lending, funds are also flowing into corporate finance," adding, "We will pursue a two-track strategy so that venture capital can flow into companies."
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