Lee Chang-yong: "The Bank of Korea's Role in Controlling Korea's Fastest-Growing Household Debt Among OECD Countries"

Lee Chang-yong, the nominee for Governor of the Bank of Korea, is arriving at the confirmation hearing office set up in the Booyoung Taepyeong Building on Sejong-daero, Jung-gu, Seoul, on the 1st, and responding to questions from the press. Photo by Joint Press Corps

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[Asia Economy Reporter Seo So-jung] "I believe the Bank of Korea must clearly signal and play a role in curbing the fastest household debt growth rate among OECD countries."

On the first day of work on the 1st, Lee Chang-yong, the nominee for the Governor of the Bank of Korea, made a candid statement about household debt while meeting with reporters in the lobby on the first floor of the Booyoung Taepyeong Building. With the hearing schedule ahead, Lee said, "If I become the Governor of the Bank of Korea, the issue I definitely want to address is household debt," adding, "Together with the Financial Services Commission and the Financial Supervisory Service, we need to make mid- to long-term efforts on how to implement policies regarding household debt overall."

In response to a question about the impact of easing total loan volume regulations on household debt, the nominee expressed concern, saying, "At the moment, household debt is linked to real estate issues and is not a risk factor, but in the mid- to long-term, it could become a significant burden for our country." He added, "With slowing growth rates and aging population, if household debt for living expenses increases more than real estate loans, the quality of household debt could deteriorate, leading to complex problems."

He emphasized, "I believe the Bank of Korea laid the groundwork to manage household debt by proactively raising the base interest rate since August last year," and stated, "If interest rates are too low compared to the equilibrium interest rate, household debt increases significantly, affecting asset prices and eventually harming national economic stabilization. Therefore, I think the Bank of Korea should play a policy role to ensure that household debt issues can be soft-landed through overall interest rate measures."