Lee Eog-weon, Chairperson of the Financial Services Commission (FSC), said on the 29th that "we will continue efforts to protect low-income people and genuine end users under a consistent household debt management stance of 'decoupling the real estate market from finance.'"
The Chairperson said at a National Policy Committee briefing at the National Assembly that "since the June 27 measures, the growth in mortgage loan balances has slowed, and the impact of household debt on the real estate market is more limited than in the past," adding the above.
According to the Financial Services Commission (FSC), the ratio of household debt to gross domestic product (GDP) fell from 98.7% in 2021 to 85.3% in the first quarter of this year. The FSC noted, however, that risk factors such as still-high household debt levels and rising market liquidity persist.
The Chairperson said that "decoupling the real estate market from finance" is a long-held conviction and expressed the view that real estate lending regulations should be maintained. The Chairperson said, "When lending is excessively loosened, it can spur real estate prices, heighten market instability, and create a structure that pushes the housing ladder farther away," adding, "Financial funds need to flow productively so they lead to the growth of corporations, jobs, and income, which will also help young people."
Regarding criticism from some that lending regulations 'deprive' actual residents and the younger generation of the opportunity to buy a home, the Chairperson said, "It is only natural to support what actual residents work for." The Chairperson added, "I will take to heart issues concerning generations and youth," but also said, "The financial authorities do not judge the choices of individual citizens; they operate policy with a view to how to steer the macroeconomy and the national economy."
The Financial Services Commission (FSC) is also accelerating reforms to the governance of financial companies. The Chairperson said, "While there have been ongoing efforts to improve systems to enhance accountability and transparency at financial companies, shortcomings have been identified in areas such as building boardroom trenches and lengthy consecutive terms for chief executive officers (CEOs)," adding, "Because financial companies manage and operate the people's assets and intermediate funds, they are required to maintain a high level of accountability and transparency." The Chairperson continued, "To break old practices in the financial sector, we will soon announce measures to improve financial company governance, including fundamentally blocking the building of boardroom trenches and improving CEO reappointment procedures, and will push follow-up steps without a hitch."