[2026 National Assembly Audit] Lee Eog-weon: "Household Debt Is Too High... Loan Regulations Should Curb Demand"

Financial Services Commission Chairman Lee Eog-weon said that loan regulations are intended to curb demand to stabilize property prices and that supply should be expanded. In response to calls for more flexible loan regulations, he said the risks posed by the overall size of household debt must also be taken into account.

Lee Eog-weon, chairman of the Financial Services Commission, answers lawmakers' questions during a comprehensive audit of the Financial Services Commission and other agencies at the National Assembly on Oct. 22, 2026. Photo by Yoon Dong-ju

At a National Assembly Political Affairs Committee audit on Oct. 22, Chairman Lee responded to a question from Shin Dong-wook, a lawmaker from the People Power Party, about regulations on property loans, saying, "Loans are basically meant to curb demand to some extent," and "Prices should be stabilized by expanding supply."

Shin pointed out that, with home prices in Seoul on the rise, loan limits were giving only cash-rich buyers the opportunity to purchase homes. He said that, given Seoul home prices, it was difficult to buy a home with a loan of just 600 million won, and asked whether financial regulations should be applied more flexibly to increase transactions and guide the market toward a soft landing.

Shin also cited the president's remark, "Who will catch the last bomb?" and said it could fuel distrust in the market. He argued that a sharp drop in home prices could reduce collateral values and increase household debt risks, and that the market should be guided toward a soft landing while maintaining appropriate collateral values.

Chairman Lee stressed that household debt in South Korea was already high. He explained that while lenders may be able to extend loans to the extent allowed by assessing individual borrowers' repayment capacity from a microprudential perspective, they must also consider the macroprudential implications of such loans accumulating and increasing the overall debt burden.

Meanwhile, Chairman Lee dismissed rumors circulating in the market about a loan ban as false. He said, "After hearing the rumor, I explained in a press release that it was not true," adding, "That will absolutely not happen."

This content was produced with the assistance of AI translation services.