BOK chief says household debt ‘not a light matter’

By 최희석

Published : Aug. 11, 2016 - 16:14

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[THE INVESTOR] Rising household debt is feeding financial risks for South Korea, and the financial authorities are discussing possible countermeasures, Bank of Korea Gov. Lee Ju-yeol said on Aug. 11.

Speaking after the Monetary Policy Meeting where the benchmark rate was frozen at 1.25 percent, Lee said that countermeasures for containing household debt may be needed.

“Household debt is rising faster than previous years, and it is acting as a factor that increases risks,” Lee said, adding that this is due to the low interest rates.

Bank of Korea Gov. Lee Ju-yeol. The Investor/ Lee Sang-sub

“The government has introduced many measures to curb the rate of increase, but the results are not visible. The authorities are closely monitoring the situation, and concerned state organizations are discussing measures.”

Since May, tougher credit review standards have been implemented across the country in an attempt to stem the rise of household debt. Before the change, only Seoul and surrounding regions required tougher requirements for home-backed loans.

While Lee hinted that the benchmark rate could be lowered further, the country is not at a stage that would require zero-percent rate.

By Choi He-suk (cheesuk@heraldcorp.com)

BOK chief says household debt ‘not a light matter’

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