Gov't to continue strengthening household debt management

As confusion in the lending field has grown due to the ‘inconsistent’ household debt policy, the government has stepped in to address the issue. Financial authorities stated they will continue strengthening household debt management and take bold additional measures if the situation worsens.

On Friday, Financial Services Commission Chairman Kim Byung-hwan held an unscheduled briefing after the macroeconomic and financial issues meeting, where he affirmed that there is no change in the government’s stance on strengthening household debt management. “Our government’s consistent position on household debt is to ensure macroeconomic stability by steadily lowering the household debt ratio. If the burden of household debt accumulates, it could become a source of instability in both the housing and financial markets,” Chairman Kim said. “If the housing market continues to overheat and household debt rises rapidly, we will implement additional measures in a timely and bold manner.”

Kim’s remarks appear to be an effort to resolve the confusion caused by recent statements from Financial Supervisory Service Governor Lee Bok-hyun regarding household loans, which have unsettled the banking sector and harmed some borrowers. However, the financial authorities continue to emphasize “self-management” in the banking industry, so individual lending regulations, which have caused recent confusion among borrowers, are expected to persist.


강우석 기자 wskang@donga.com