Seungbeom Ko - Juyeol Lee Emphasize "Resolving Financial Imbalances Including Household Debt"

First Meeting at the Bank of Korea Headquarters
Likely Discussed Solutions for the Electronic Financial Transactions Act

Financial Services Commission Chairman Ko Seung-beom is delivering a congratulatory speech at the Shinhan Financial Group's 20th anniversary 'World Economic Research Institute-Shinhan Financial Group International Conference' held at Lotte Hotel in Jung-gu, Seoul on the 2nd. Photo by Moon Ho-nam munonam@

[Asia Economy Reporter Kim Jin-ho] Ko Seung-beom, Chairman of the Financial Services Commission, and Lee Ju-yeol, Governor of the Bank of Korea, jointly emphasized close cooperation between the FSC and the Bank of Korea to resolve 'financial imbalances' such as household debt.

Chairman Ko and Governor Lee made these remarks during their first meeting, which also served as an introductory meeting, held on the 3rd at the Bank of Korea headquarters in Jung-gu, Seoul. This is the first time a Financial Services Commission chairman has directly visited the Bank of Korea to communicate.

At the meeting, the two leaders promised close cooperation through information sharing and exchange of opinions on the current economic and financial situation, including the progress of COVID-19 and risks of financial imbalances. In particular, they agreed to jointly review and prepare for the economic and financial impacts of efforts to alleviate financial imbalances such as the accumulation of household debt and changes in the global policy stance, including interest rate hikes.

Governor Lee pointed out the concentration in asset markets and the increase in household debt, stating, "It is necessary to mitigate these through appropriate operation of monetary policy and macroprudential policy." This was interpreted as an indirect indication that the base interest rate could be raised at least once more within the year.

Chairman Ko shared the same view. He said, "Proactive management to resolve financial imbalances such as the increase in household debt and overheating of asset markets is urgent," adding, "Let us diagnose risk factors amid uncertainty and guide the recovery of the real and livelihood economy."

He continued, "The FSC and the Bank of Korea should respond meticulously through closer policy coordination and collaboration than ever before," and added, "Let us continue to meet frequently without formality and communicate through various channels."

During the meeting, the two also appeared to exchange opinions on the amendment to the Electronic Financial Transactions Act. The FSC and the Bank of Korea have repeatedly clashed over the amendment bill, running on parallel tracks.

However, since Chairman Ko has long worked closely with Governor Lee as a member of the Bank of Korea’s Monetary Policy Committee, there is hope that the two will find a solution. It is analyzed that Chairman Ko, who has a high understanding of the central bank’s core tasks, will serve as a bridge between the two institutions.

Meanwhile, Chairman Ko also held a first introductory meeting with Jeong Eun-bo, Governor of the Financial Supervisory Service, the day before. At the meeting, the two emphasized "communication and cooperation" as their top priority. They shared a consensus that the conflict phase between the two institutions, which arose during the tenures of former FSC Chairman Eun Sung-soo and former FSS Governor Yoon Seok-heon, must come to an end.

In response, Chairman Ko also promised full support at the organizational and budgetary levels to enable the FSS to effectively carry out its heavy workload.

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