South Korea’s financial watchdog chief warns of household debt turning into systemic risk

SEOUL: South Korea’s financial watchdog chief on Tuesday expressed concern about a rapid pick-up in household debt and said such financial imbalance may turn into systemic risk.

“There are concerns that it may turn into a systemic risk, as financial imbalances accumulate and soundness deteriorates should home prices undergo correction,” Lee Bok-hyun said at a meeting with local banks.

South Korea has one of the world’s highest household debt-to-economy ratios, with more than 60 per cent of loans tied to mortgages at local banks.