Lee Bok-hyun, Financial Supervisory Service Chief, "Loan-Deposit Interest Rate Spread Disclosure Must Control Information Transparency for Competition"

5th KB Kookmin Bank, 'Visiting KB SOHO Mentoring School' Meeting
Regarding Criticism of Loan-Deposit Interest Rate Spread Disclosure System: "Improvement Efforts Until Second Half"
Financial Support Program Direction Expected to Take Shape by Mid-September

Lee Bok-hyun, Governor of the Financial Supervisory Service

[Asia Economy Reporter Song Seung-seop] "(The disclosure system for the interest rate spread between loans and deposits) faces criticism, but to make the market mechanism competitive, we have no choice but to control it to ensure transparency of information."

On the 5th, Lee Bok-hyun, Governor of the Financial Supervisory Service (FSS), made this remark during a meeting with reporters after attending the 'Visiting KB SOHO Mentoring School' held at the KB Kookmin Bank headquarters in Yeongdeungpo-gu, Seoul, in response to questions about the bank sector's disclosure system for the interest rate spread between loans and deposits.

The interest rate spread disclosure system is a system that publicly reveals the difference between the average loan interest rate and the average interest rate on savings deposits of major banks. It began monthly disclosures through the Bankers Association website starting from the 22nd of last month. Since the introduction of the system, there have been many criticisms that the interest rate spread appears higher when handling financial products aimed at low-income earners, resulting in distorted outcomes. In the midst of growing complaints, the head of the FSS directly emphasized the necessity of the interest rate spread disclosure system.

However, he showed openness to various criticisms. Governor Lee said, "The financial authorities tried to monitor distortions caused by differences in credit ratings or when handling loans for middle- and low-credit borrowers, but since this is the first time, there may have been shortcomings." He added, "We are well aware of the view that raising deposit interest rates could distort the market." Regarding the banking sector's requests to change the disclosure method, he said, "We will listen carefully and strive to improve the disclosure system by the second half of the year."

"Extension of maturity and repayment deferral likely to be decided around mid-September"

The decision on whether to end or extend the principal maturity extension and interest repayment deferral policy for small business owners and self-employed individuals, scheduled to end at the end of September, is expected to be clarified after the Chuseok holiday. Governor Lee said, "(Regarding the end of financial support policies) not only the financial authorities but also myself and the Deputy Prime Minister for Economy are deeply considering this." He added, "Whatever decision is made, there may be critical views, but if possible, we are trying to prepare a response method that causes less controversy."

He continued, "Although cautiously, I think we will be able to explain how the financial support program will proceed after the holiday (Chuseok) and around mid-September." When asked if the policy could be extended again, he replied, "We do not necessarily exclude various possibilities," and added, "We are internally analyzing various data with financial institutions."

He also emphasized the current inter-agency cooperation regarding abnormal foreign exchange transactions that have surfaced in the banking sector. Governor Lee said, "We have already provided initial data to the prosecution, and we are actively cooperating with any additional data or analysis support that could serve as a foundation." He evaluated, "We have established a similar cooperative relationship with the Korea Customs Service, and we are jointly clarifying the facts."

Meanwhile, regarding the delay in the schedule of the German Heritage Fund dispute mediation committee, he stated, "I understand that the FSS is making various efforts to secure materials."

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