"Structural Alternatives Needed to Reduce Household Debt... Active Financial Role Required"

Opening Remarks at the Joint Symposium of the Bank of Korea and the Korean Finance Association

"Currently, our financial market and economy are facing more complex challenges and rapidly changing environments than ever before. In this context, a proactive role of finance and new approaches are increasingly required."

On the 5th, Kwak Noh-sun, President of the Korea Financial Association, said this in his opening remarks at the policy symposium titled 'Challenges of Household and Corporate Finance in Korea,' jointly hosted by the Bank of Korea and the Korea Financial Association at the Conference Hall on the 2nd floor of the Bank of Korea Annex in Jung-gu, Seoul.

President Kwak evaluated the recent financial market by stating, "From the household finance perspective, the increase in household debt has not slowed down, and from the corporate finance perspective, the carbon neutrality goals due to the climate crisis are expected to have a significant impact on corporate management. Also, restructuring of marginal companies has been delayed due to the pandemic."

He added, "As housing prices rise and fall, regulations related to housing have been repeatedly tightened and eased, causing persistent market instability. Now is the time for more structural alternatives to reduce household debt," and proposed, "The introduction of REITs could be a new measure to curb the rapid increase in household debt."

He continued, "Various policies aimed at achieving carbon neutrality worldwide are expected to have a significant impact on the Korean economy, especially the manufacturing sector," and said, "Transition finance, which supports the low-carbon transition of high-carbon industries, is a key tool to underpin the green transition of the overall economy."

Regarding marginal companies whose management conditions have worsened after COVID-19, he stated, "Due to the abnormal deterioration of the business environment caused by COVID-19, the financial function for marginal companies was not properly exercised," and added, "With the end of the pandemic, revitalizing the restoration process of financial functions will contribute to enhancing financial stability through financial risk management by discussing the current status and response measures for marginal companies."

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