Financial Services Commission Chairman Urges Strengthening of DSR and Autonomous Management by Banks to Curb Household Debt

Kim Byung-hwan, Chairman of the Financial Services Commission, speaks during a meeting of real estate-related ministers at the Government Complex in Seoul on the 8th.

Financial Services Commission Chairman Kim Byung-hwan expressed concerns about the rising household debt during a meeting with the banking sector on the 20th and urged banks to establish an autonomous management system.

In particular, he announced plans to raise the DSR stress interest rate for mortgage loans in Seoul and the metropolitan area by 1.2%p from September to curb the increase in household debt.

Chairman Kim also addressed the controversy over high profits in the banking sector, emphasizing that banks should fulfill their social responsibilities through efforts to strengthen competitiveness and innovate.

Additionally, he proposed that banks actively support the resolution of small business debt issues and suggested the establishment of a debt management system that considers borrowers' repayment abilities.

He urged the banking sector to break away from traditional business models and build a sustainable growth model suited for the digital and data economy era, promising necessary regulatory improvements. He also called for a comprehensive review of internal control systems to resolve recent trust issues in banks.

Commercial bank presidents requested regulatory easing to promote innovative services, while regional bank presidents proposed strengthening collaboration for regional economic revitalization.