Opposition: "Banking Sector Earns Huge Profit from Loan-Deposit Interest Rate Gap... Financial Authorities Must Intervene"

"Deposit Interest Rates Fell but Loan Rates Remain Unchanged"
"Warning Voices Including Introduction of 'Hoengjaese' Tax"

[Asia Economy Reporters Naju-seok and Geum Bo-ryeong] The People Power Party has been continuously pressuring the banking sector by raising the issue of the interest rate spread between deposits and loans. The party leadership urged not only self-reflection within the banking sector but also for financial authorities to step up supervision.

On the 12th, Joo Ho-young, the floor leader of the People Power Party, stated at the Emergency Response Committee meeting, "The interest rate spread between deposits and loans is large, causing many difficulties for ordinary citizens," adding, "As of the 10th, the highest interest rates for major time deposit products at the five major commercial banks ranged from 3.89% to 4.27%, down by 1 percentage point over two months compared to over 5% in November last year. However, mortgage loan interest rates at the five major banks recorded between 4.93% and 8.11%. The upper limit of mortgage loan interest rates exceeding 8% is the first time since the 2008 financial crisis."

Joo criticized, "With such a large interest rate spread, the interest income of eight major commercial banks last year is estimated to reach a staggering 53 trillion won, which is more than 8 trillion won higher than in 2021."

He urged, "Financial authorities should thoroughly supervise to ensure no illegal or unfair practices occur during this process," and requested, "Commercial banks should set reasonable interest rate spreads so that ordinary citizens do not suffer from the interest rate gap amid already difficult economic conditions."

[Image source=Yonhap News]

Kim Sang-hoon, a member of the People Power Party's Emergency Committee, also criticized, "The banking sector is holding a record-breaking bonus party at the expense of the people's suffering," adding, "When the Bank of Korea raised the base interest rate due to global inflation, banks sharply increased loan interest rates. When financial authorities recommended restraint on rate hikes, banks lowered deposit rates but left loan rates unchanged." Kim pointed out, "Mortgage loan interest rates exceed 8%, while deposit rates have fallen to the 3% range," and mentioned, "Shinhan Bank sets bonuses at 361% of the base salary, NongHyup at 400%, and KB Financial pays 280% of the base salary plus a special bonus of 3.4 million won." He said, "Although there is talk about a windfall tax, it is insufficient. Even the advanced free-market economy of the United States has usury punishment laws," emphasizing, "Before legal regulations, it is time for self-reflection in the banking sector and serious consideration and solutions from financial authorities."

Cho Kyung-tae, a member of the People Power Party, also stated via social media, "While ordinary citizens struggle with high interest rates and high prices, banks have posted record profits and emerged as the main culprits destroying the ordinary economy," urging, "Commercial banks must immediately stop their despicable behavior of exploiting ordinary citizens to fill their own pockets." Cho added, "During the foreign exchange crisis, it was not the market but the people who prevented bank failures with tens of trillions of won in taxpayer money," warning, "We will no longer tolerate betrayal of the people." He further urged, "Financial authorities must also devise all possible policy measures to prevent predatory profits by banks."

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