[Editorial] Alarming Signs in Money Flow as Borrowing for Investment Surges

The balance of Overdraft Accounts at the five major commercial banks has reached 40.7 trillion won, marking the highest level in three years. Notably, in December alone, the balance increased by 674.5 billion won, three times the growth rate seen in November. Overdraft Accounts are typically used as a financial tool when urgent cash is needed. However, the sharp rise in both the balance and the pace of increase signals abnormal trends in the domestic money flow.
The core issue is where this money is flowing. As real estate prices have recently risen, the government has tightened mortgage loans, leading financial consumers to flock to Overdraft Accounts. However, some analysts point out that the demand for leveraged investments in high-risk assets such as stocks, gold, and Bitcoin (BTC) is also being channeled through these accounts. Securing funds through Overdraft Accounts to invest in high-risk assets is a reckless investment behavior. The situation has reached a point where borrowing is used not just for urgent living expenses but also to cover investments in risky assets. If the market becomes volatile, declining returns will further undermine household financial soundness.
The balloon effect, where borrowing demand shifts from mortgage loans to Overdraft Accounts due to stricter mortgage regulations, is not a matter to be taken lightly. The government’s real estate measures and household loan regulations are certainly necessary. However, when one faucet is shut, the water simply flows elsewhere. If mortgage loans are restricted, people turn to Overdraft Accounts; if those are blocked, they will seek other alternatives. Moreover, Overdraft Accounts, being unsecured, carry higher interest rates and greater repayment pressure. If asset prices fall, households will be hit immediately.
A social perception that one must grow assets through investment, even by borrowing, appears to be fueling the demand for Overdraft Accounts. The frustration that it is difficult to build wealth through earned income alone, and the impatience to avoid being left out of asset price increases, are driving this borrowing-for-investment trend. The Overdraft Account balance, now exceeding 40 trillion won, is by no means a small sum. This figure reflects households enduring on debt and ordinary people being pushed toward speculation. The debt bomb could explode at any time.
The balloon effect, in which loan demand shifts from mortgage loans to Overdraft Accounts, cannot be dismissed as a mere change in loan types. Rather, it serves as a warning light, highlighting the structural vulnerabilities of our economy. The government needs to comprehensively manage the soundness of household debt.
Given the current global economic environment, managing household debt is even more urgent. In a recent report, the Hyundai Research Institute (HRI) emphasized that the global economy faces five major systemic risks: prolonged low growth, asset bubble bursts, an economic slowdown in China, a sharp increase in government debt worldwide, and the recurrence of a Pandemic. In particular, HRI identified the potential collapse of asset market bubbles due to excessive liquidity as a key risk factor.
It is said that ominous signs of a global economic crisis are looming for next year. As economic uncertainty intensifies, it is all the more vital to thoroughly manage household debt. The greater the volume of toxic household debt, the more vulnerable the economy becomes to external shocks. Conversely, strengthening the soundness of household debt will enhance the economy’s overall shock-absorbing capacity. This must not be forgotten.