Lee Bok-hyun "Possibility of Market Interest Rate Increase... Checking Real Estate PF Risk"

Lee Bok-hyun, Governor of the Financial Supervisory Service [Photo by Yonhap News]

[Asia Economy Reporter Buaeri] On the 23rd, Lee Bok-hyun, Governor of the Financial Supervisory Service, emphasized the need to "closely examine the impact on financial consumers and the real estate project financing (PF) market" in relation to the Bank of Korea's decision to keep the base interest rate unchanged.

Governor Lee held a 'Financial Situation Review Meeting' in the afternoon and said, "Although the base interest rate has been frozen, market interest rates may rise further depending on recent international financial market conditions."

He added, "Carefully analyze the recent trend of rising delinquency rates and devise risk management measures to provide proactive support to vulnerable borrowers and ensure soundness."

According to the Financial Supervisory Service, as of the end of September last year, the delinquency rate in the banking sector was 0.21%, an increase of 0.01 percentage points compared to the end of June last year. The delinquency rate of savings banks rose by 0.35 percentage points from 2.6% to 2.95%. The delinquency rate in the mutual finance sector was about 1.4% as of the end of September last year, up 0.08 percentage points from 1.32% at the end of June, and for credit card companies, it increased by 0.05 percentage points to 1.01%.

Governor Lee also instructed to inspect the evaluation status of financial companies regarding real estate PF projects and to promptly consult with the financial sector to establish agreements among financial sectors and joint lenders.

Furthermore, he urged financial companies to maintain significantly higher levels of reserves and capital ratios compared to normal times, guiding them to have sufficient loss absorption capacity in preparation for crisis situations.

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