FSC chief urges stricter non-house mortgages

The national financial regulator will strengthen risk management over the land- and commercial building-backed mortgage loans, seeking to control the country’s snowballing household debt, its top official said.

New Financial Services Commission chairman Yim Jong-yong said in the weekly working-level meeting on Friday that the regulator would “make precise analyses of the household debt conditions, as if performing an MRI.”

“We are planning on more active management on the land- and commercial building-backed loans,” while keeping a close watch the house-backed mortgage issues the FSC chief said.

“We will continue to monitor for a while how the previously enacted policies work out (in the market),” he added.

The meeting came four days after Yim’s inauguration. Eleven working-level experts from the private sector, including the household credit unit of local banks’ credit rating firms, and government officials from the Financial Supervisory Service and the Korea Housing Finance Corp., attended the meeting with the FSC chairman.

Yim emphasized that the FSC would lead the financial companies to take responsibility when they to make a thorough assessment of the borrowers’ ability to pay back.

By Chung Joo-won (joowonc@heraldcorp.com)