Seungbeom Ko Meets with Chairmen of Five Major Financial Holding Companies, Emphasizes "Household Debt Management as Top Priority"

First Meeting Since Inauguration... All Five Major Financial Holding Company Chairmen Attend
Review of Possible Extension of COVID-19 Financial Support Measures

On the 10th, Chairman Go Seung-beom held a meeting at the Bankers Club of the Korea Federation of Banks in Jung-gu, Seoul, with KB Financial Group Chairman Yoon Jong-kyu, Hana Financial Group Chairman Kim Jung-tae, NH Nonghyup Financial Group Chairman Son Byung-hwan, Woori Financial Group Chairman Son Tae-seung, and Shinhan Financial Group Chairman Cho Yong-byeong.

[Asia Economy Reporter Kim Jin-ho] Ko Seung-beom, Chairman of the Financial Services Commission, held his first meeting with the chairmen of the five major financial holding companies on the 10th and emphasized making "household debt management" the top priority. Attending the meeting were Yoon Jong-kyu, Chairman of KB Financial Group; Cho Yong-byeong, Chairman of Shinhan Financial Group; Kim Jung-tae, Chairman of Hana Financial Group; Sohn Tae-seung, Chairman of Woori Financial Group; and Sohn Byung-hwan, Chairman of NH Nonghyup Financial Group.

At the meeting held at 2:30 p.m. at the Bankers’ Hall in Jung-gu, Seoul, Ko said, "Strengthening household debt management is not an option but an essential and top priority task." This was his first official meeting with the financial holding company chairmen since taking office, serving also as a greeting on his inauguration. The meeting was reportedly arranged to discuss measures to strengthen the management of the rapidly increasing household debt and whether to extend the maturity extension and interest repayment deferral measures for small business owners and self-employed individuals, which are set to expire at the end of this month.

Ko first addressed household debt, diagnosing that "an increase in debt exceeding the growth rate of the real economy is a risk factor that raises the probability of a crisis in our economy," and that "the recent rise in household debt is close to a dangerous level due to its side effects, such as overheating the asset market and causing mutual reinforcement."

He added, "We will continue to steadfastly implement existing household loan policies and make multifaceted efforts to enhance their effectiveness."

Ko urged the chairmen of the five major financial holding companies to make efforts in managing household debt risks. According to the Financial Services Commission, household loans from the five major financial holding companies account for about half (approximately 47%) of the total household loans in the domestic financial sector. Ko said, "Please pay attention to whether there are any household loans excessively supported regardless of actual demand and whether there are latent risks in managing household loans in the secondary financial sector." In response, the financial holding company chairmen pledged, "We will take direct responsibility and conduct thorough inspections." They also promised to actively cooperate with the government’s household debt management policy and meet the household debt growth rate target (5-6% within this year).

The direction for handling the maturity extension and repayment deferral measures implemented in response to the COVID-19 crisis was also discussed. Ko emphasized, "In the crisis situation caused by COVID-19, cooperation and efforts among economic agents for mutual growth are more important than anything else," and urged, "Both the financial authorities and the financial sector must unite their efforts to derive reasonable measures." The financial holding company chairmen responded, "We will do our best to support the real economy sector financially." According to the financial sector, the plan to extend the loan maturity for self-employed individuals and others by six months as before is being strongly considered. However, the interest deferral measure is being considered for discontinuation.

They also listened to the difficulties and suggestions of the financial holding companies regarding the regulatory framework for digital financial innovation. Considering the acceleration of digital transformation in the financial environment, the financial holding company chairmen requested, "Please improve the financial regulatory system so that financial companies can demonstrate creativity and innovation in line with the changed environment." Ko responded, "We will review the major regulatory improvement tasks that the financial sector considers important."

Meanwhile, in his opening remarks before the meeting, Ko presented "market-friendly policies and supervision that respect the creativity and autonomy of financial companies" as the basic principle of financial policy and supervision. Ko said, "Regarding management decisions such as interest rates, fees, and dividends, we will, in principle, respect the autonomous decisions of financial companies as much as possible," and added, "Even in cases where unavoidable intervention is necessary, such as financial stability and macroprudential management, we will proceed with ▲minimal intervention ▲fair and transparent procedures ▲market-friendly methods."

He added, "All measures will be carried out based on sufficient communication and consultation to gain the consensus of market participants."

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