Financial Services Commission Chairman Eun Sung-soo on Tuesday said that Korea will continue to face domestic and external uncertainties next year, pledging to add speed to the country’s drive for financial innovation.
He also stood by the government’s latest and controversial real estate regulations, citing them as necessary steps to curb the country’s overheated housing market.
Financial Services Commission Chairman Eun Sung-soo (FSC)
“Domestic and external uncertainties are expected to prolong throughout next year and the low interest rate may continue to disturb the capital market,” the FSC chief told reporters in a year-end press conference, which also marked his 100th day in office.
“We shall focus our policy capacities on responding preemptively to capital market instability and speeding up financial innovation.”
The FSC will place priority on innovating the financial industry through financial technology and big data, while also sustaining efforts to upgrade the business practice of conventional financial companies, he added.
On the previous day, financial authorities gave preliminary approval to the consortium led by Viva Republica -- operator of mobile money transfer service Toss -- to launch the nation’s third internet-only bank. After final approval in the first half of 2021, Toss Bank will kick off to compete with Kakao Bank and K bank.
“We hope that internet-only banks will take the initiative in sustainable financial innovation in the future,” Eun said.
The FSC chief also advocated the government’s comprehensive housing market regulations, which had triggered considerable backlash the previous day.
On Monday, economy-related ministers led by Deputy Prime Minister and Finance Minister Hong Nam-ki unveiled unprecedented real estate measures to offset previous ones that have failed to curb rising housing prices.
The action plans included a total ban on mortgage loans for Seoul apartments priced 1.5 billion won ($1.29 million) or more.
“The latest measures have been adopted upon the grave awareness that the housing market stability is crucial for the sake of sound economic development,” Eun said.
Eun will also have to sell one of his two residences, in line with presidential chief of staff Noh Young-min’s message to senior Cheong Wa Dae and government officials to dispose of their surplus real estate assets in the metropolitan area.
“I can be no exception (from the principle),” he said.
“Right after the related meetings yesterday, at around 5 p.m., I told my tenant (that I will be selling the house).”
When asked about market concerns that the mortgage ban on high-priced apartments may ironically raise the price of relatively cheaper assets, Eun underlined the need to address the nation’s soaring housing prices in a long-term perspective.
“Some claim that the latest loan restrictions will stop the middle class from buying their own homes, but we need to ask ourselves the following question: Can the middle class people afford their home, with or without loans, under the current price uptrend?” he said.
The market tends to be preoccupied with the imminent loan restrictions but the purpose of the latest measures is to steady the housing prices so that actual end users may afford the purchase, according to Eun.
By Bae Hyun-jung (tellme@heraldcorp.com)
