Lee Criticizes Bad Bank 'Sangroksu': "Is It Right to Repay Debts That Have Grown 20-Fold, Even by Selling Every Last Bean Sprout?"

President Lee Presides Over Cabinet and Emergency Economic Review Meetings

Criticizes Financial Firms: "Enjoying Benefits Without Shouldering Burdens"

Orders Financial Services Commission to Seek Legislative Solutions


Warns Agains

President Lee Jae-myung, on May 12, addressed long-standing livelihood issues in the financial sector, such as the collection of long-term overdue debts and illegal high-interest loans that emerged during the credit card crisis. He instructed relevant ministries to devise strong countermeasures. President Lee criticized financial institutions by stating, "It is not right to enjoy benefits while refusing to bear any burdens," and ordered that solutions, including potential legislative action, be considered if necessary.

In addition, President Lee reiterated the importance of maintaining an active fiscal policy, emphasizing that the government should not fall into the trap of populist 'austerity theory' advocated by some, especially during a time when proactive livelihood policies are needed.

President Lee Jae-myung is speaking at the Cabinet Meeting and Emergency Economic Inspection Meeting held at the Blue House on the 12th. Photo by Yonhap News Agency

During the Cabinet Meeting combined with the Emergency Economic Inspection Meeting, held at the Blue House on this day, President Lee stated, "We are working to address issues in the financial and real sectors, but it seems there are still some problems that remain unresolved." He characterized the problems in the financial sector as part of the 'normalization of abnormalities in daily life,' stressing that stabilizing people's livelihoods begins with correcting the distortions embedded in everyday life.

President Lee further remarked, "Financial institutions are not loan sharks," and first mentioned the private bad bank ‘Sangnoksoo’, instructing officials to seek solutions through legislation if necessary to align with the public's moral sentiments.

He also commented, "It seems there are organizations that collect and manage the debts of delinquent borrowers under the guise of organizing non-performing loans from the card crisis, but they are still actively pursuing debt collection. Didn't the companies and financial institutions receive government support funded by taxpayers' money during the card crisis?" This points to the inappropriateness of financial institutions, which received fiscal assistance from the government following the 2002-2003 card crisis, still collecting individual debts.

President Lee was especially critical of the long-standing overdue debt issue following the credit card crisis, stating, "Credit card companies received full government support, but among the users who were the cause, those who became delinquent have seen their debts grow for over 20 years, with a few tens of millions of won turning into several hundred million won due to interest. How are they supposed to live?" He added, "From the public's perspective, does it make sense that even if the debt grows ten or twentyfold until death, people must repay it even by selling every last possession? If necessary, find solutions through legislation."

He continued, "Financial institutions are not loan sharks, and they also operate using the state's currency-issuing authority, as well as benefit from licensing and approval systems. Therefore, they must also bear public regulations and obligations."

President Lee also strongly criticized the issue of illegal private finance, where debtors are charged annual interest rates exceeding 60 percent. He said, "I read an article about someone who borrowed 500,000 won and had to repay it as a gift certificate just nine days later—this is a clear violation of the Interest Limitation Act. Settling debts with goods or alternative products instead of money does not exempt one from the Lending Business Act."

He added, "Regardless of what fees are called, if the total annual cost exceeds 60 percent of the borrowed amount, shouldn't the borrower be relieved of even the principal? It appears there are still unscrupulous loan sharks engaging in these practices. The police should intensify their crackdowns." He particularly noted, "Young people are falling victim to these schemes," and urged, "Make sure the public does not wonder why these cases are visible to journalists but not to investigative agencies."

Lee: "We Must Not Fall Into the Trap of Populist Austerity"

President Lee Jae-myung is asking Yoon Ho-jung, the Minister of the Interior and Safety, questions during the Cabinet meeting combined with the Emergency Economic Inspection meeting held at the Blue House on the 12th. Photo by Yonhap News Agency

Furthermore, President Lee criticized the 'austerity theory' advocated by some, once again emphasizing the necessity of active fiscal policy. While thrift was once considered a virtue, he argued that the government's role now is to stimulate the economic cycle through investment.

President Lee stated, "Research has confirmed that the active and strategic management of public finances can provide real momentum to the livelihood economy. Despite these objective facts, there are still voices in society calling for austerity, citing national debt as justification. In reality, these are irresponsible calls to ignore the public's hardship."

He went on to say, "It has been confirmed that last year's livelihood coupons increased small business sales by an additional 430,000 won for every 1 million won in consumption coupons. In other words, a fiscal input of 1 million won generated a total economic effect of 1.43 million won."

President Lee asserted that by activating domestic demand and raising the economic growth rate and gross domestic product (GDP) through proactive fiscal policy, the denominator will grow and the national debt ratio will actually fall. He emphasized, "If potential growth and productivity are improved, the revenue base will expand, and the debt ratio will decrease in the long run, creating a virtuous cycle. We must not fall into the trap of populist austerity that deceives the public."

He concluded, "The government must focus its efforts on laying the foundation for a major leap in the national economy through proactive fiscal policy. Based on this approach, please prepare the economic growth strategy for the second half of the year and next year's budget."

Meanwhile, on this day, Kim Yongbeom, policy chief at the Blue House, proposed the idea of a so-called 'national dividend,' which involves returning a portion of structural excess profits generated in the era of artificial intelligence (AI) infrastructure to the public. Given that competition in infrastructure such as AI semiconductors, power grids, and data centers could transform the structure of Korea's economy, he suggested a new social contract is needed to ensure that the benefits are distributed throughout society, rather than being concentrated among certain companies or asset holders.

Kim Yongbeom wrote in a Facebook post titled "A Different Dimension of the Nation: Korea's Long-term Strategy in the AI Era," that "the fruits of the AI infrastructure era are not the sole result of any one company. They are built upon the industrial foundation that the entire nation has developed together over half a century." He continued, "Therefore, a portion of those benefits should be structurally returned to all citizens—this is the justification and principle behind the design." Kim referred to this principle as the tentative 'national dividend.'

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