Lee Chang-yong "Household Debt Growth Accelerating... Bank of Korea Will Play a Role"

First Day at the Hearing TF Office
Efforts Needed for a Soft Landing Through Interest Rates

Lee Chang-yong, the nominee for Governor of the Bank of Korea, is arriving at the confirmation hearing office set up in the Booyoung Taepyeong Building on Sejong-daero, Jung-gu, Seoul, on the 1st, and responding to questions from the press. Photo by Joint Press Corps

[Asia Economy Reporter Seo So-jung] "The Bank of Korea must clearly signal and play a role to curb the fastest household debt growth rate among OECD countries, which is Korea."

On the 1st, Lee Chang-yong, the nominee for Governor of the Bank of Korea, made a resolute statement on resolving household debt while meeting reporters in the lobby of Booyoung Taepyeong Building in Jung-gu, Seoul.

Lee, who started his first day at the National Assembly hearing preparation task force (TF) office that day, said, "The issue I definitely want to solve if I become the Governor of the Bank of Korea is household debt," adding, "The Financial Services Commission and the Financial Supervisory Service, together with us, need to make mid- to long-term efforts on how to comprehensively implement policies regarding household debt."

In response to a question about the impact of easing total loan volume regulations on household debt, Lee said, "At the moment, household debt is linked to real estate issues and is not a risk factor, but in the mid- to long-term, it could become a significant burden for our country," expressing concern that "due to slowing growth and aging, if older people start taking out household loans for living expenses rather than real estate loans, the quality of household debt could deteriorate and complex problems may arise."

He emphasized, "I believe that since the Bank of Korea proactively raised the base interest rate starting last August, it has laid the groundwork to adjust household debt," adding, "Household debt negatively affects national economic stabilization, so I think the Bank of Korea should strive to ensure that the household debt issue can soft-land through overall interest rate policies."

Regarding criticism that government policies and monetary policy are out of sync due to the second supplementary budget (supplementary budget), he said, "The tension between the government, which must be responsible for growth, and the central bank, which must consider inflation, is natural," and added, "Recently, central banks comprehensively consider inflation, growth, financial stability, and the macroeconomy, taking into account consistency and coherence with government policies, so I think it is important to coordinate policies amid conflicts."

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