Nominee for Financial Services Commission Chairman Ko Seung-beom Hearing... 'Household Debt and Virtual Currency' Key Issues

Focus Expected on Financial Issues and Policy Directions Over Background Checks
Cryptocurrency and Electronic Financial Transactions Act Likely to Be Key Concerns

Nominee for Financial Services Commission Chairman, Ko Seung-beom, is arriving at the confirmation hearing office set up at the Korea Deposit Insurance Corporation in Jung-gu, Seoul on the 6th. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Jin-ho Kim] The confirmation hearing for Go Seung-beom, the nominee for Financial Services Commission chairman, will be held today at the National Assembly. The management of household debt, which has emerged as the biggest risk to the Korean economy, and issues related to virtual currency are expected to be the key points of contention.

According to financial authorities and political circles on the 27th, the National Assembly's Political Affairs Committee will hold a plenary session at 10 a.m. to conduct the confirmation hearing for nominee Go.

Both ruling and opposition parties are expected to focus more on reviewing Go’s expertise on various financial issues and future policy directions rather than personal background checks. Above all, financial policies addressing household debt, which has reached 1,800 trillion won, are considered a major issue. The Bank of Korea raised the base interest rate by 0.25 percentage points on the same day, further heightening concerns about household debt.

In a written response to the confirmation hearing on the 25th, nominee Go emphasized, "We will strongly push forward the previously announced household debt management measures while continuously striving to enhance their effectiveness, and if necessary, actively discover and implement additional measures using all available policy tools."

He added, "Excessive credit growth leads to the formation and collapse of bubbles, which deteriorates financial soundness and the function of fund intermediation, potentially hindering real economic growth. Therefore, resolving the macroeconomic risks caused by household debt is urgent at this point."

Accordingly, the schedule for the gradual expansion of the Debt Service Ratio (DSR) by borrower, originally planned until July 2023, is expected to be reconsidered. Nominee Go has mentioned that he will review whether the schedule is appropriate. Additionally, regulatory strengthening is anticipated to prepare for various so-called 'balloon effects' that may occur in the secondary financial sector due to household loan regulations centered on banks.

Furthermore, the termination of the COVID-19 loan maturity extension and interest payment deferral measures, which are set to end in September, is also expected to be a contentious issue. Since there may be criticism that banks are being forced to sacrifice unilaterally, the financial sector is paying close attention to nominee Go’s responses.

Moreover, future regulatory directions for virtual currency, amendments to the Electronic Financial Transactions Act, the necessity of the Financial Supervisory Service’s independence, and the Merge Point incident are also expected to be major points of interest.

In addition, personal issues such as allegations that nominee Go’s family engaged in false address registration to secure his eldest son’s elementary school placement and the fact that his eldest son interned at Korea Investment & Securities, where his uncle is chairman, are also likely to spark some controversy.

On the 25th, the Financial Services Commission clarified regarding some media reports that nominee Go was unable to properly attend meetings due to conflicts of interest, stating, "He is excluded only from specific agenda items, not from the entire meeting."

This content was produced with the assistance of AI translation services.