Lee Bok-hyun: "Urgent Need to Stimulate Domestic Economy.. Consistent Pursuit of Issues Such as Household Debt"

[Financial News] Lee Bok-hyun, the Governor of the Financial Supervisory Service, stated on the 29th, "In order for the new government, which will be launched soon, to focus on economic recovery, issues such as the resolution of non-performing project financing (PF), household debt management, support for small businesses, capital market advancement, and financial stability should be pursued consistently regardless of politics."
Governor Lee said this during a financial situation review meeting held immediately after the Bank of Korea's base rate cut. He added, "Thoroughly prepare for various future policy tasks such as the new government's response to aging, AI regulatory innovation, and digital asset ecosystem maintenance."
The Financial Supervisory Service diagnosed that despite the Bank of Korea's base rate cut, the rise in global long-term interest rates due to concerns about fiscal soundness in the United States and Japan is increasing the upward pressure on domestic market interest rates.
Although there was a ruling by the U.S. Federal Court to cancel the tariff order on the morning of that day, it is analyzed that trade conflicts and exchange rate instability could be re-emphasized at any time, as legal responses by the U.S. administration or other administrative measures through trade pressure are possible.
The Financial Supervisory Service predicted that such policy uncertainty negatively impacts investment and consumption, and market volatility could be greatly amplified depending on the level of economic indicators announced in the future. The Bank of Korea also lowered its growth forecast for this year to 0.8%, diagnosing that economic stimulation is more urgent than ever.
Governor Lee instructed to stably manage the temporarily increased household debt due to the impact of the land transaction permit system and IPO subscriptions, and to prepare for the smooth implementation of the three-stage stress total debt service ratio (DSR).
He also advised to closely examine the difficulties of small business owners and self-employed people suffering from sluggish domestic demand, and low-credit companies significantly affected by industrial sluggishness. He urged financial companies with high delinquency rate increases to guide the accumulation of loan loss provisions and capital expansion, and to actively induce the sale and purchase of non-performing loans and debt restructuring.
In preparation for AI innovation in the financial sector and the use of stablecoins for payment and settlement, he instructed to comprehensively review infrastructure, regulatory systems, and the impact on the financial system, and to thoroughly check unfair trading such as political theme stocks during the election period to maintain a sound market order.

sjmary@fnnews.com Seo Hye-jin Reporter