[2020 National Audit] Financial Services Commission Chairman "Considering DSR Expansion"..."Concerned About Jeonse Loans"

Financial Services Commission Chairman Eun Sung-soo is attending the National Assembly's Public Administration and Security Committee hearing on the Financial Services Commission held on the 12th, responding to questions from lawmakers. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Kim Min-young] Eun Sung-soo, Chairman of the Financial Services Commission, stated on the 12th that "we are considering expanding the Debt Service Ratio (DSR) as a measure to manage household debt."

Chairman Eun made this remark during the National Assembly's Political Affairs Committee audit, responding to Rep. Oh Ki-hyung of the Democratic Party of Korea's concern that "jeonse loans and credit loans are rapidly increasing."

Chairman Eun emphasized that jeonse loans are intended for ordinary citizens and said, "We are hesitant to reduce or block jeonse loans because of concerns about who would be harmed."

He stressed, "DSR ensures borrowing within one's capacity, which benefits both the borrowers and the soundness of financial institutions."

DSR is an indicator that calculates the principal and interest repayment burden on all existing loans (credit, collateral, etc.) of a borrower during loan screening. Currently, a DSR regulation of 40% (60% for non-bank sectors) is applied individually to new mortgage loans secured by houses priced over 900 million won in speculative areas and speculative overheating districts.

Earlier, on the 7th, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, also stated during the audit, "There is a need to expand DSR to comprehensively control loans."

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