(MENAFN) South Korea's household debt, which increased sharply this year, is possibly harmful to the local bank industry, thus the government has put out a series of crucial measures to slow the debt down.
Due to the Bank of Korea's four rate cuts that sent the key interest rate to a record low of 1.5 percent, household debt enlarged significantly, and things get worse as U.S. Federal Reserve prepares to bring its first rate hike in a decade.
In July, the government constricted the screening of borrowers' repayment abilities, plus it has declared policy measures that encourage borrowers to take out fixed-rate and long-term loans over floating-rate and short-term loans.
"Since a lot of people are expecting the move, as long as it happens in a gradual manner, it is unlikely to lead to a sharp outflow of funds or funding and refinancing risks," said the head of analytics in Asia-Pacific.
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