[2021 National Audit] Go Seung-beom "Financial Imbalance Accumulated Due to COVID-19... Will Strengthen Household Debt and Asset Market Management"

National Assembly Political Affairs Committee Conducts National Audit Targeting Financial Services Commission

Financial Services Commission Chairman Ko Seung-beom is delivering opening remarks at the economic and financial market experts meeting held on the 27th at the Bankers' Hall in Jung-gu, Seoul. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Jin-ho Kim] Ko Seung-beom, Chairman of the Financial Services Commission, stated on the 6th, "We will strengthen the management of household debt, which has surged due to the accumulation of financial imbalances caused by the prolonged COVID-19 pandemic, and the overheated asset market." However, he added that financial support for small business owners and others affected by COVID-19 must continue and be reinforced.

Chairman Ko made these remarks during the Financial Services Commission's audit held by the National Assembly's Political Affairs Committee on the same day, emphasizing that "support for overcoming COVID-19 and strengthening the management of potential risks" is the most important.

He first said that they will continue strong measures to ensure that household debt, which is increasing at the fastest rate in the world, does not become a risk factor for the economy and finance. Along with efforts to manage the household debt growth rate at around 6%, he revealed that they are preparing additional measures and thoroughly implementing existing policies such as expanding the Debt Service Ratio (DSR) at the borrower level. However, he noted that care will be taken to ensure that there are no difficulties in financing for actual demanders, low-income groups, and vulnerable populations.

In particular, he said, "Financial imbalances, such as the accumulation of debt and rapid rise in asset prices, have intensified due to financial easing policies in response to COVID-19," adding, "As major countries recently pursue normalization of their easing stances, financial market volatility may increase, so we will closely monitor market trends and take necessary measures."

However, he also said that financial support measures for vulnerable groups who have become more difficult will continue to be strengthened. The Financial Services Commission has supported about 120 trillion won so far through a financial stability plan worth 175 trillion won+@ for small business owners and SMEs affected by the prolonged COVID-19 pandemic. In addition, the extension of loan maturity and principal and interest repayment deferral measures related to COVID-19 has been further extended until March next year.

He also announced plans to expand funding supply to productive sectors. He said efforts will be made to channel more funds into digital innovation industries, green industries such as renewable energy, and New Deal industries, which will be the future sources of income for the next generation. To this end, the Financial Services Commission plans to improve the listing system for innovative companies in the capital market so that they can smoothly receive venture capital. Specifically, they plan to expand securities firms' equity stakes in initial public offerings (IPOs) and promote Business Development Companies (BDCs) that invest in unlisted and KONEX companies.

He also emphasized innovation in the financial industry through digital finance. Chairman Ko said, "As fintech activation and the entry of big tech companies into the financial industry expand, competition and innovation across finance are accelerating," adding, "We will actively support policy finance tailored to the growth stages of fintech companies' startups and commercialization, as well as promote private investment."

He added, "We will continuously monitor and respond to ensure that the expansion of big tech companies' financial entry does not undermine competition and stability and that there are no gaps in consumer protection."

Furthermore, he said that great efforts will be made to strengthen financial services for low-income groups and protect financial consumers. He stated, "We are fully committed to expanding financial services for low-income groups and providing tailored support to resolve financial difficulties for vulnerable populations," adding, "We have completed institutional improvements to protect investors related to the private equity fund incident and will strictly respond to unregistered companies such as Merge Point."

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