Four Economic Chiefs: "Manage Household Debt Growth Rate Around 6%, Protect Genuine Borrowers" (Comprehensive Report 2)

Next Month's 'Household Debt Management Plan Announcement'
Economic Leaders "Policy Coordination and Cooperation Are Important"

Financial authorities attending the 'Macroeconomic Financial Meeting' held on the 30th at the Bankers Hall in Jung-gu, Seoul, greet each other before the meeting. From the left, Eunbo Jeong, Governor of the Financial Supervisory Service; Seungbeom Go, Chairman of the Financial Services Commission; Namgi Hong, Deputy Prime Minister and Minister of Economy and Finance; and Juyeol Lee, Governor of the Bank of Korea. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Jang Sehee] The heads of the economy, monetary policy, and finance sectors plan to manage this year's household debt growth rate at around 6%. Additionally, the 'Household Debt Management Plan' to be announced next month will include measures to protect actual borrowers.

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, attended the macroeconomic finance meeting held at the Seoul Banking Hall on the 30th and stated, "We will seek a direction that suppresses the increase in household debt as much as possible while allowing borrowers who genuinely need loans to borrow within their repayment capacity." He added, "We will prepare and announce the household debt management plan within October."

In particular, the plan is to manage this year's household debt growth rate at around 6% and ensure that loans are made within the borrower's repayment capacity. This is interpreted as a shared stance on the need to resolve the issue of 'financial imbalance,' where excessive debt is used for asset investment.

The meeting was attended by Lee Ju-yeol, Governor of the Bank of Korea; Ko Seung-beom, the newly appointed Chairman of the Financial Services Commission; and Jung Eun-bo, the newly appointed Governor of the Financial Supervisory Service. It was the first time in about seven months since February 18 that the four heads of fiscal, monetary, and financial authorities gathered in one place. It was also the first meeting since Chairman Ko and Governor Jung took office last month.

They also discussed measures to prepare for domestic and international shocks arising from recent changes in internal and external economic conditions. Deputy Prime Minister Hong emphasized, "We cannot rule out the possibility of external risks emerging, such as delays in resolving global supply bottlenecks, rising domestic and international interest rates due to recent U.S. debt ceiling negotiations and tapering concerns, and increased volatility in stock and foreign exchange markets."

He added, "It is important to ensure that issues arising from uneven recovery leading to widening gaps, weakening fundamentals of vulnerable groups and marginal companies, and liquidity expansion in real estate and household debt do not destabilize the economic recovery process."

He also dispelled concerns about discord between fiscal and monetary policies raised by some quarters. Deputy Prime Minister Hong said, "During such a transitional period, meticulous and delicate policy coordination and cooperation among relevant authorities are absolutely essential, just as the joint efforts to respond to the COVID-19 crisis were."

Furthermore, they agreed to harmoniously operate macroeconomic, fiscal, and financial policies to alleviate financial imbalances alongside economic recovery.

Going forward, they plan to hold four-party meetings more frequently, both officially and unofficially, to share perceptions of the economic and financial situation and coordinate policies during this transitional phase of the macroeconomy.

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