Lee Bok-hyeon, the head of the Financial Supervisory Service, who has a little over a month left in his term, clarified his future position, stating that he will not join the opposition party. Lee's term ends on June 5.
On the morning of the 27th, this head appeared on the YouTube channel "Sampro TV" and said, "Being a conservative and a market-oriented person, I won't do anything, but if I do, it will be in the conservative realm; I will not be joining the opposition party." He added, "But if I were going to do politics, I would have run last year; I made that decision back then."
He continued, "The current environment is much worse, and it seems that I am not mentally ready to the extent of sacrificing myself for politics. I am still young, and having been in public service for about 25 years, I think it would be good to engage in different activities."
Regarding the criticism that excessive household debt management has harmed actual consumers, he acknowledged that there is some validity to the criticism. However, he reiterated his stance that household debt should be maintained close to the nominal GDP, adding that the goal of the financial authorities is household debt, not real estate prices.
He explained, "In the first half of last year, banks significantly lowered interest rates and engaged in a lot of loan marketing. Major retail banks achieved household loan targets for the year in the first half, in severe cases exceeding 160%, resulting in monthly household debt increases exceeding 10 trillion won, which led to that decision. I know very well what the side effects of such increases are."
He also elaborated, "The S&P and Moody's noted that one of the macro risk factors for South Korea was the high household debt ratio, indicating that financial risks from household debt or excessive interest burdens could suppress total demand in society and hinder economic growth; that is the number one risk."
Furthermore, he stated that household debt management cannot control the prices of specific real estate, and that the management policy from the second half of last year was also judged and operated from the perspective of household debt. He emphasized, "This has been managed over the past three years, and the context of last year's management by the authorities was largely in that aspect, just as we cannot control household debt with the benchmark interest rate, we cannot control specific real estate through household debt management."