ID :
204542
Wed, 08/31/2011 - 10:55
Auther :
Shortlink :
https://oananews.org//node/204542
The shortlink copeid
S. Korea's household debt continues to rise in Aug.
SEOUL, Aug. 31 (Yonhap) -- Household loans extended by South Korea's financial institutions are estimated to have grown by more than 5 trillion won (US$4.66 billion) in August despite the regulator's efforts to curb home debt, data showed Wednesday.
Household loans, including mortgage lending and credit loans, are projected to have expanded by 4.9 trillion won in the Aug. 1-26 period, according to data compiled by regulatory authorities. Given high month-end demand, the expansion of household loans is widely expected to surpass 5 trillion won this month.
The August growth compared with a 4.3 trillion won expansion tallied in July and a total of near 10 trillion won in household loans expanded in two months even after the government unveiled a set of measures to curb household loans in June.
The financial regulator is considering further actions to control household indebtedness, which market watchers say would invite complaints from local banks.
Snowballing household debt is unnerving policymakers as households' high indebtedness is feared to crimp consumer spending, thereby compromising the growth of the local economy.
Household credit, including loans and credit purchases, reached 876.3 trillion won as of end-June.
In late June, the government laid out a set of measures to curb rising household debt by tightening banks' loan-to-deposit ratios and mending banks' lending practices.
But despite the move, local banks' household loan growth is not showing signs of easing. Several major banks have halted the extension of fresh household loans until this month in a move widely seen as yielding to the regulator's pressure.
Meanwhile, in a related move, the financial watchdog has instructed local card firms to cap the annual growth of card issuances at around 3 percent. It also urged them to increase card loans less than 5 percent annually.
Financial Supervisory Service (FSS) Gov. Kwon Hyouk-se called on local card companies on Tuesday to strengthen their risk management as banks' recent moves to halt household loans could raise demand for card loans.
Mindful of the risks of a credit card boom, the financial regulator is seeking to limit credit card companies' total assets and new card issuance, as well as marketing costs.
sooyeon@yna.co.kr
Household loans, including mortgage lending and credit loans, are projected to have expanded by 4.9 trillion won in the Aug. 1-26 period, according to data compiled by regulatory authorities. Given high month-end demand, the expansion of household loans is widely expected to surpass 5 trillion won this month.
The August growth compared with a 4.3 trillion won expansion tallied in July and a total of near 10 trillion won in household loans expanded in two months even after the government unveiled a set of measures to curb household loans in June.
The financial regulator is considering further actions to control household indebtedness, which market watchers say would invite complaints from local banks.
Snowballing household debt is unnerving policymakers as households' high indebtedness is feared to crimp consumer spending, thereby compromising the growth of the local economy.
Household credit, including loans and credit purchases, reached 876.3 trillion won as of end-June.
In late June, the government laid out a set of measures to curb rising household debt by tightening banks' loan-to-deposit ratios and mending banks' lending practices.
But despite the move, local banks' household loan growth is not showing signs of easing. Several major banks have halted the extension of fresh household loans until this month in a move widely seen as yielding to the regulator's pressure.
Meanwhile, in a related move, the financial watchdog has instructed local card firms to cap the annual growth of card issuances at around 3 percent. It also urged them to increase card loans less than 5 percent annually.
Financial Supervisory Service (FSS) Gov. Kwon Hyouk-se called on local card companies on Tuesday to strengthen their risk management as banks' recent moves to halt household loans could raise demand for card loans.
Mindful of the risks of a credit card boom, the financial regulator is seeking to limit credit card companies' total assets and new card issuance, as well as marketing costs.
sooyeon@yna.co.kr
