Skepticism emerges on real role of financial authorities
Top financial regulators’ move to curb the growth of household lending in the banking sector doesn’t appear to have gained widespread support, even among ordinary regulatory officials.
Financial Services Commission chairman Kim Seok-dong has reportedly initiated the recent guidelines which pressure commercial banks to reduce household loans by raising lending rates.
Apart from criticism of banks or the FSC in the market, there is a skeptical view among the staff of the Financial Supervisory Service, an executive arm of the FSC.
“There is no doubt that the policy to curb banks’ lending has been mapped out by FSC Chairman Kim and several senior officials,” an FSS official said on condition of anonymity.
He said the following measures, including alleged suspension of household lending at a bank, are shouldering heavy burden on a great portion of households.
“The financial authorities should take on the role of ease burdens of financial consumers,” he said. “But at the current stage, it seems that the authorities exist only for the sake of financial companies.”
A junior staffer of the FSS also said he cannot agree with the recent measures.
Commenting on the FSC chief’s former remarks that “the government exists to control the market,” he said, “Market controlling without putting priority on rights of the public would be maladministration.”
Several research analysts have already cast anxiety about the situation under which individuals suffering from tighter loan screening process.
Hyundai Economic Research Institute economist Park Deok-bae said, “Household debt issue is certainly problematic. But it is undesirable for the authorities to lead more borrowers to the secondary financial companies (after instructs first-tier banks to reduce lending).”
Further, the authorities are set to unveil another round of measures to curb the lending.
