Hyun-song Shin: "Monetary Policy Alone Is Not Enough to Address Household Debt... Macroprudential Policies Needed Together"

by Kim Hye Min

Published 15 Apr.2026 16:45(KST)

Confirmation Hearing for Bank of Korea Governor Nominee

Hyun-song Shin, nominee for Governor of the Bank of Korea, stated on April 15 that "monetary policy through interest rate adjustments alone is not sufficient to control household debt," emphasizing the need to use macroprudential policy tools such as the debt service ratio (DSR) in conjunction.

Shin Hyun-song, the nominee for the Governor of the Bank of Korea, is attending the confirmation hearing held by the National Assembly's Finance and Economic Planning Committee on April 15, 2026. Photo by Kim Hyun-min

During the confirmation hearing at the National Assembly's Finance and Economy Committee that afternoon, Shin remarked, "Household debt in Korea remains at a high level," and added, "It continues to be a constraint not only on financial stability but also on growth." Regarding the causes behind the expansion of household debt, he pointed out, "The financial system's heavy focus on real estate is causing problems."

In response to Assemblyman Oh Ki-hyung of the Democratic Party of Korea, who noted that Korea, unlike the United States and others, failed to deleverage household debt after the 2008 Lehman Brothers crisis, Shin replied, "Countries that experienced the global financial crisis very severely were able to successfully deleverage," and explained, "Korea did not face such a major crisis at that time compared to the United States and the United Kingdom, so household debt increased at a relatively moderate pace."

Shin continued, "Since monetary policy affects the entire economy indiscriminately, I believe it is appropriate to use macroprudential policies that can be targeted to address household debt issues," adding, "The DSR policy is one such measure." However, he also noted, "The DSR policy alone is insufficient, and it is better to use multiple policies comprehensively together."

Regarding the Bank of Korea taking charge of DSR management, he commented, "Because the DSR is directly related to the authority to supervise financial institutions, there would likely be significant issues if the Bank of Korea were to oversee it," and added, "(The Bank of Korea) does not conduct micro-level supervision of financial institutions, so it could be difficult." He further stated, "I believe relevant agencies should cooperate to establish an overall framework for financial regulation."