Seungbeom Go: "Additional Regulations on Household Debt if Necessary... Consideration for Real Demanders" (Comprehensive Report 2)

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On the 27th, Go Seung-beom, the nominee for the Financial Services Commission chairman, appeared at the confirmation hearing held at the National Assembly and took the witness oath. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Kim Jin-ho] Go Seung-beom, nominee for Financial Services Commission (FSC) chairman, emphasized on the 27th that his top priority after taking office will be financial stability through household debt management. He also hinted at additional regulatory tightening if necessary and pledged to spare no policy consideration to prevent actual borrowers from suffering damage in the process.

At the National Assembly’s Political Affairs Committee confirmation hearing, Go said, "I 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. Go stated, "I will review whether the gradual expansion of the DSR is appropriate."

Regarding concerns that total loan volume regulations, applied indiscriminately to loans such as credit and jeonse (key money deposit) loans, could harm low-income and actual borrowers, he responded, "There are certainly difficulties in managing total volume, but we will carefully consider and implement policies so that actual borrowers do not suffer."

On the recent recommendation by financial authorities to commercial banks to reduce loan limits to within annual income, Go expressed the view that "this is not government intervention." He explained, "Once I take office, I intend to pursue market-friendly policies and will create plans through consultation on goals such as household debt management."

He also indicated his intention to extend the maturity extension and interest payment deferral measures for COVID-19 loans. Go said, "Considering the serious COVID-19 quarantine situation, decisions should be made with full consideration of the difficulties faced by small and medium-sized enterprises and self-employed individuals."

Regarding calls to extend the reporting deadline for virtual currency operators, he reaffirmed his previous stance that "it is appropriate to keep the schedule to prevent user damage." Go emphasized, "Extending the period could increase trust protection issues and user damage, so the schedule must be maintained."

On the recent large-scale refund controversy surrounding the "Merge Point incident," he responded, "We will assess the actual situation and check if there are similar cases."

Regarding the Bank of Korea’s recent base rate hike, he said, "Subjectively, I actively support it," adding, "One rate hike is not enough. Considering the accumulation of financial imbalances and the resulting increase in household debt, further rate hikes seem necessary."

He also stated that the controversial launch of the debt refinancing platform will be "reviewed from the beginning." Previously, the FSC had been preparing the platform aiming for an October launch. Once established, the platform will allow consumers to conveniently compare interest rates and switch loans non-face-to-face and in a one-stop manner without visiting bank counters.

Regarding the court ruling that canceled the FSC’s heavy disciplinary action against Sohn Tae-seung, chairman of Woori Financial Group, Go said, "I will review the judgment and see if institutional improvements are necessary." The Seoul Administrative Court’s Administrative Division 11 (Chief Judge Kang Woo-chan) ruled in favor of Sohn and another plaintiff in their cancellation lawsuit against the Financial Supervisory Service (FSS). Earlier, in January last year, the FSS had issued a heavy disciplinary warning to Sohn for responsibility in the DLF (Derivative Linked Fund) incident. At that time, Sohn was the CEO of Woori Bank.

Meanwhile, Go struggled to explain the controversy over restrictions on his duties. The opposition party launched a concentrated attack on Go’s relationship with Kim Nam-gu, chairman of Korea Investment Holdings, who is his brother-in-law. According to the FSC Establishment Act, if Go becomes FSC chairman, he must recuse himself from FSC decisions related to Korea Financial Group or Kakao Bank.

In response, Go explained, "Regarding Korea Investment Holdings, I voluntarily recused myself from decisions when I was serving on the FSC and Monetary Policy Committee if there was a reason for recusal," adding, "In recent years, decisions related to Korea Investment Holdings accounted for only 1% of all agenda items."

He further added, "Korea Investment Holdings has rather suffered disadvantages because of me, not benefited, and regulatory staff are fully aware of this and will perform their duties fairly."

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