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Tougher measures in store to rein in household debt: top regulator

All News 15:39 August 31, 2021

SEOUL, Aug. 31 (Yonhap) -- Financial authorities will unveil additional measures to rein in household debts, the new head of the financial regulator said Tuesday.

Koh Seung-beom, the new chairman of the Financial Service Commission (FSC), said that curbing household debts is his top priority.

"I will mobilize all available policy means to reduce risks of surging household debts," Koh said, but stopped short of saying when the FSC will unveil additional measures.

The FSC will make a decision on whether to extend the grace period for loan repayments for small merchants, who were hit by the fourth wave of the COVID-19 pandemic, before the Chuseok holiday, Koh said.

Koh Seung-beom, nominee for chief of the Financial Services Commission, takes an oath during his parliamentary confirmation hearing at the National Assembly in Seoul on Aug. 27, 2021. (Yonhap)

Households' high indebtedness has been cited as the main bugbear for the South Korean economy.

South Korea's household credit grew at a faster pace in the second quarter as non-banking financial firms increased loans.

Household credit reached a record high of 1,805.9 trillion won (US$1.54 trillion) as of June, up 41.2 trillion won from three months earlier, according to the BOK data.

The second-quarter tally compared with a 37.6 trillion-won on-quarter rise in the first quarter.

The growth has shown no signs of letting up as more people have taken out loans to buy homes amid skyrocketing housing prices. Demand for unsecured loans also remains high amid a boom in stock investments.


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