Kim Byoung-hwan, a former vice finance minister who has been nominated as the chief of Financial Services Commission, speaks during a parliamentary confirmation hearing held at the National Assembly, Monday. (Yonhap)

The nominee to head the Financial Services Commission said Monday that the authorities would manage rising household loans amid concerns that such fast-rising loans could hurt economic recovery and the financial system.

"We are in a situation to remain guarded (against the pace of household loans)," Kim Byoung-hwan, a former vice finance minister who was nominated as the FSC chief, said during a parliamentary confirmation hearing. "Authorities will thoroughly manage such loans."

Household loans extended by banks rose for the third consecutive month in June, with outstanding household loans from banks standing at 1,115.5 trillion won (US$805 billion) as of end-June.

Amid high market rates, the delinquency ratio on loans extended by banks also rose for a second consecutive month in May.

The delinquency ratio for corporate loans had come to 0.58 percent as of end-May, up 0.04 percentage point from a month earlier. The ratio for household loans came to 0.42 percent, up 0.02 percentage point from April, data showed.

The nominee also said he is cautious about allowing corporations to hold bank accounts for transactions of cryptocurrencies.

"Taking into consideration the chaos we have experienced in the virtual asset market in the past, the current policy should prioritize investor protection," Kim told lawmakers.

Kim said there should be consideration about "whether the permission for corporations or institutions would be appropriate."

Asked by another lawmaker about whether South Korea should allow transactions of spot bitcoin exchange traded funds, Kim also took a cautious tone, replying that financial authorities "need to look at the financial market stability and the impact on financial institutions."