Published : Jan. 5, 2022 - 14:36
Jeong Eun-bo, chief of the Financial Supervisory Service, speaks during an online press briefing on Dec. 21, 2021, in this photo provided by his agency. (FSS)
South Korea's chief financial regulator said Wednesday that he is looking into loan and interest rates set by financial institutions amid complaints that their spread is widening, deepening the financial burden on many consumers.
Jeong Eun-bo, head of the Financial Supervisory Service (FSS), made the remarks as criticism has grown that banks and other financial firms are quicker to increase their loan rates than raise rates on deposits.
The rate hikes are in line with the central bank's push to increase borrowing costs to tame inflation, but critics say the widening loan-deposit margin is just fattening the pockets of financial firms at the expense of consumers.
"We have looked into deposit rates first and are now looking into loan rates imposed by each institution," Jeong told reporters after having a meeting with financial market researchers in central Seoul.
He expressed hope that such a probe will help the overall interest rates be adjusted in a way that will benefit customers.
The remarks are in line with what he said during an online press meeting last month in which he vowed to take "necessary" action if the deposit-loan rate spread widens beyond "reasonable" levels.
Borrowing costs have been on the rise at a fast clip recently as the government has tightened rules on making loans to rein in soaring household debt and inflation.
In November, the Bank of Korea raised its policy rate by a percentage point to 1 percent, ending about two years of the zero rate range put in place to prop up the pandemic-hit economy. It was the second rate hike in three months. (Yonhap)