Kwon Dae-young, Secretary-General of the Financial Services Commission, said, "This is not a situation to hesitate," applying pressure on banks to lower their lending rates.
Secretary-General Kwon noted during a pre-briefing on "household debt management measures for 2025" held at the government building in Gwanghwamun, Seoul, on the 26th, that "Woori Bank proactively lowered its lending rates without delay in response to the interest rate cut yesterday." He emphasized the need for banks to act, as the time lag in reflecting the Bank of Korea's interest rate cut in market rates has prompted him to urge banks that do not lower their lending rates.
Secretary-General Kwon stated, "I believe banks need to take action." He acknowledged, "I understand that it's challenging for banks, as they are urged to manage lending while being told to lower rates like this," but added, "However, the public is not satisfied with the current rate reaction speed. I hope we can see a rate movement that the public can feel."
He continued, "The public is uncomfortable with the fact that deposit rates decrease quickly while lending rates fall slowly, so I hope adjustments can be made immediately." He added, "Fundamentally, interest rates are decided autonomously, and it is not an area for direct government intervention. However, regarding the current temporary issue, authorities will sufficiently communicate with banks as adjustments are made."
Regarding providing incentives for managing household debt to banks handling local housing loans, Secretary-General Kwon stated, "It is just that we allowed a bit of room because we are concerned that the financial sector might not cover reasonable local real estate demand, but that itself is not a signal to take on debt to buy a home."
Secretary-General Kwon mentioned, "This year, we aim to manage the increase in household debt within the nominal growth rate of 3.8%, expecting the banking sector's lending increase rate to be around 1-2%, while local banks are seeing a higher estimate of about 5-6%. The mutual finance sector is expected to be in the late 2% to early 3% range, and savings banks will likely be around 4%."