Obviously fall has come and the weather is getting a little cold in Korea. Today, to warm you up a bit, I am introducing you the hottest news these days.
Have you ever heard of ‘parliamentary inspection of the administration’? Most of the countries around the world have introduced this system since a long time ago. This is for the purpose of checking up whether each government body under the administration is on its right track and serving the given role.
So what is being ‘inspected’? Let me tell you more closely about the inspection system. On October 8, the parliamentary inspection was held at the National Assembly, targeting the finance-related government entities. Of course, FSC is one of those entities, being subject to the inspection. So, from now on, I will focus on the talks made by FSC’s Chairman, Kim Seok-Dong, during the public gearing.
The main topic of the public hearing was on the issue of ‘house poor’. Do you guys know what a house poor is? I hope you do, as I wrote the article on this matter just a month ago! Just in case you haven’t read my article, I will briefly explain it. House poor is a term referring to the households having their own houses but regarded as being poor. Then, why are they poor even if they have their own houses? This is because those people purchase their houses with excessive mortgage loans at low interest rates, when the housing prices skyrocket.
Now, assuming that you have got an idea of house poor, let’s get back to our issue today. During the hearing, the political circles were strongly pushing their assertion on the house poor against the financial authorities. They urged that government should inject financial aid to save those house poor.
However, their argument was in contrary to Mr. Kim’s point of view. Mr. Kim made it clear that the problem of house poor is owed to the borrowers’ faults. It was those borrowers who purchased their houses with excessive mortgage loans at their own wills, even though there is some extent of fault made by monetary and financial institutions. Those institutions should have been more careful about managing the households’ loans. However, primarily, the problem of house poor should be solved by the banks and borrowers themselves. Accordingly, injecting government’s money would take place later on when the problem seems under the state of emergency. Regarding the current economic slow-down which appears to be protracted for a while, Mr. Kim promised that FSC along with other related bodies will try their best to correspond to the economic problems.
As written in my previous articles, the financial institutions in cooperation with banks and other related agencies are introducing new policies such as ‘trust and lease back’ program and ‘free work out policy’. These policies are closely designed to help households in need. I am expecting that the political circles and the administration cooperate to bring out the best and most efficient outgrowth for our economy.