Kim Byung-hwan, Financial Services Commission Chairman, "T-Mef Incident, Authorities Are Not Free from Responsibility"

"System Improvement, Step-by-Step Discussions with Relevant Authorities"
Attended 'New Start Fund Small Business Owners and Self-Employed Meeting' as First Action After Inauguration
Emphasized "Managing Household Debt with Vigilance" Amid Rapid Increase
July Household Loans at Five Major Banks Show Largest Growth in Over Three Years

Kim Byung-hwan, Chairman of the Financial Services Commission, stated that the financial authorities bear responsibility for the unsettled payment incidents involving TMON and WEMAKEPRICE, and expressed his intention to promptly implement institutional improvements. He also conveyed a stance to actively address concerns regarding the recent surge in household loans, including issues related to loans for small business owners and self-employed individuals, as these are pressing problems facing our financial market.

On the 1st, after attending the 'New Start Fund Small Business Owners and Self-Employed Meeting' held at the Korea Asset Management Corporation (KAMCO) Yangjae Tower in Seoul as his first external activity since taking office, Chairman Kim told reporters that in response to criticism that the cause of the incident was supervisory negligence, "The financial authorities cannot be free from responsibility in this matter."

He added that although there were institutional limitations, they will continue discussions on institutional improvements with relevant agencies in a responsible manner. Chairman Kim said, "Realistically, there were institutional constraints, but we are naturally taking a responsible stance in the process of causing inconvenience and difficulties to the public," and added, "The supervisory authorities cannot make all the institutional improvements alone, so the relevant ministries will proceed with discussions step by step."

He also discussed the TMON and WEMAKEPRICE incidents during his first meeting with Lee Bok-hyun, Governor of the Financial Supervisory Service, earlier that morning. The two leaders agreed to swiftly promote consumer damage relief and resolve financial difficulties for sellers, while cooperating with related agencies to intensively inspect illegal activities and promptly prepare institutional improvement measures to prevent similar issues from recurring in the future.

Chairman Kim also expressed his intention to actively alleviate concerns regarding household debt and debt issues faced by self-employed individuals and small business owners. During his meeting with Governor Lee Bok-hyun, he identified household debt, real estate project financing (PF), self-employed and small business owner debt, and the soundness of the secondary financial sector as the four major risks currently confronting our financial market.

Chairman Kim said, "The debt problem of self-employed individuals and small business owners is a real issue for those who are struggling, so I came to the field as my first schedule," adding, "There were difficulties raised that the New Start Fund does not cover refinancing loans within six months, and I will continue to listen to such voices on site going forward." He further stated, "Although it has not reached the New Start Fund stage yet, there is a need to discuss parts where the banking sector can participate to help those in difficulty."

Regarding the management of household debt, which has surged in recent months, he emphasized that a 'contingency plan' will be prepared and managed with vigilance. As of the end of July, the outstanding household loans of the five major commercial banks?KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup?were recorded at 715.7383 trillion won. This represents an increase of 7.166 trillion won compared to the end of June, marking the largest monthly increase in three years and three months since April 2021 (9.2266 trillion won).

Mortgage loans surged by 7.5975 trillion won from 552.1526 trillion won to 559.7501 trillion won, increasing the overall household loan burden. Credit loans decreased by 17.13 billion won from 102.7781 trillion won to 102.6068 trillion won. Although banks have consecutively raised household loan interest rates last month under pressure from financial authorities, it was insufficient to curb the growing loan demand.

Chairman Kim explained, "We have prepared in advance by monitoring the intensity of measures that supervisory authorities can use to manage household debt, so that if necessary situations arise, we can act without delay."

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