ID :
78819
Mon, 09/07/2009 - 17:19
Auther :
Shortlink :
https://oananews.org//node/78819
The shortlink copeid
Watchdog concerned about growth pace of household debt: chief
(ATTN: CHANGES headline, lead; UPDATES throughout)
By Kim Soo-yeon
SEOUL, Sept. 7 (Yonhap) -- South Korea's top financial regulator on Monday
expressed concern about the pace of growth in household debt, though he said he
did not see the sheer size of household debt as a risk.
Amid rising housing prices, the increasing rate of home-backed loans is widely
feared to raise household debt and spark possible asset inflation down the road
when the economy begins to pick up.
"We do not see the absolute size of household debt as a risk factor, but the
government is concerned about the upward trend of such debts and home-backed
lending," Chin Dong-soo, chairman of the Financial Services Commission, said
during a press conference with foreign correspondents here. "We are closely
monitoring the situation and trying to take appropriate policy measures."
His remarks came as the Financial Supervisory Service said Friday it will impose
limits on bank mortgage lending in the capital Seoul and two adjacent areas to
curb a recent surge in such loans. The move follows its strengthening of similar
rules on home-backed loans in July.
As of the end of June, outstanding household credit stood at 697.7 trillion won
(US$565.4 billion), up 2.1 percent from three months earlier, according to the
Bank of Korea.
Many experts say rising household debt, coupled with stagnant income growth, is
eroding the capacity of households to repay debt, a situation that is feared to
deteriorate further if the central bank raises its key interest rate down the
road.
"There are still some latent risks in the economy, such as unemployment, the
recent hike in the real estate market, and rising household debt ... We will act
promptly to contain any potential risk before it becomes a serious threat to the
overall economy," Chin said.
He added the watchdog will keep close tabs on trends in short-term funds and bank
lending and take aggressive actions if any abnormal movement of capital takes
place.
sooyeon@yna.co.kr
(END)
By Kim Soo-yeon
SEOUL, Sept. 7 (Yonhap) -- South Korea's top financial regulator on Monday
expressed concern about the pace of growth in household debt, though he said he
did not see the sheer size of household debt as a risk.
Amid rising housing prices, the increasing rate of home-backed loans is widely
feared to raise household debt and spark possible asset inflation down the road
when the economy begins to pick up.
"We do not see the absolute size of household debt as a risk factor, but the
government is concerned about the upward trend of such debts and home-backed
lending," Chin Dong-soo, chairman of the Financial Services Commission, said
during a press conference with foreign correspondents here. "We are closely
monitoring the situation and trying to take appropriate policy measures."
His remarks came as the Financial Supervisory Service said Friday it will impose
limits on bank mortgage lending in the capital Seoul and two adjacent areas to
curb a recent surge in such loans. The move follows its strengthening of similar
rules on home-backed loans in July.
As of the end of June, outstanding household credit stood at 697.7 trillion won
(US$565.4 billion), up 2.1 percent from three months earlier, according to the
Bank of Korea.
Many experts say rising household debt, coupled with stagnant income growth, is
eroding the capacity of households to repay debt, a situation that is feared to
deteriorate further if the central bank raises its key interest rate down the
road.
"There are still some latent risks in the economy, such as unemployment, the
recent hike in the real estate market, and rising household debt ... We will act
promptly to contain any potential risk before it becomes a serious threat to the
overall economy," Chin said.
He added the watchdog will keep close tabs on trends in short-term funds and bank
lending and take aggressive actions if any abnormal movement of capital takes
place.
sooyeon@yna.co.kr
(END)
