Seungbeom Go: "Household Debt Management is the Top Priority"... Indicates Possible Additional Regulations

COVID-19 Loan Issue "Reflect Small Business Difficulties"
"Consider Additional Improvement Measures" for Cryptocurrency Exchange Closure Crisis

On the 6th, Ko Seung-beom, the nominee for Chairman of the Financial Services Commission, responded to reporters' questions as he arrived at the confirmation hearing office set up at the Korea Deposit Insurance Corporation in Jung-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporters Kwangho Lee and Jinho Kim] Candidate for Financial Services Commission Chairman, Go Seung-beom, stated that after taking office, he will prioritize financial stability through household debt management and design and implement financial policies for the development of the financial industry.

In his opening remarks at the National Assembly’s Political Affairs Committee confirmation hearing on the 27th, Candidate Go said, "The increase in household debt was inevitable during the response to the COVID-19 crisis," and emphasized, "We will mobilize all possible policy capabilities to manage the rapidly increasing household debt so that it does not undermine financial market stability."

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. Candidate Go recently mentioned to reporters that he would review whether the schedule is appropriate. Additionally, regulatory strengthening is anticipated to address various ‘balloon effects’ that may occur in the so-called secondary financial sector due to household loan regulations centered on banks.

Candidate Go stated, "We will steadily implement the measures announced so far and prepare additional measures if necessary," adding, "We will also implement complementary measures to ensure that there is no inconvenience to low-income and vulnerable groups."

He particularly noted, "Regarding the extension and repayment deferral of loans for small and medium-sized enterprises (SMEs) and small business owners, which is approaching the end of September, it is necessary to fully reflect their difficulties," suggesting the possibility of extension. According to the Financial Services Commission, from February last year to the end of June this year, the amount of extended loan maturities for SMEs and small business owners was 192.5 trillion won, with principal and interest repayment deferrals amounting to 11.7 trillion won and 200 billion won respectively, totaling approximately 204.4 trillion won. Regarding concerns about potential expansion of non-performing loans, he said, "We will closely communicate with the financial sector and seek supplementary measures."

He also recognized the cryptocurrency market issue as an important current financial market concern. Among 63 exchanges, 24 are expected to effectively close after the registration deadline for cryptocurrency operators on the 24th of next month. Particularly, only one exchange has completed registration, raising widespread concerns that the cryptocurrency market will face severe turmoil next month. Candidate Go said, "We will promptly share relevant information to minimize damage to market participants until the registration deadline for cryptocurrency operators’ trading business on the 24th of next month," and added, "We will review additional institutional improvement measures focusing on international consistency and protection of citizens’ property rights."

He also expressed plans to explore cooperation methods among big tech, fintech, and existing financial sectors. Given the recent intensifying conflicts between sectors over platforms such as refinancing loan platforms, this is interpreted as an intention to find common ground that all parties can understand. Candidate Go said, "We will establish a regulatory framework suitable for the new financial environment," and "We will accelerate financial innovation through market-friendly policies based on continuous communication with the field."

Regarding the side effects of big tech’s entry into the financial industry, such as ▲ conflicts and gaps with existing regulations and ▲ excessive market dominance based on platforms, he added, "We will resolve these issues rationally and fairly."

He also pledged to carefully address consumer protection issues triggered by overseas interest rate-linked derivative-linked funds (DLF) and the Merge Point incident. Candidate Go said, "The series of financial accidents including DLF was a painful experience that damaged the trust, which is the foundation of finance," and "We will promote thorough management and supervision to prevent recurrence of financial accidents." He added, "We will also pay attention to newly emerging consumer protection issues in the digital environment, such as the Merge Point incident."

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