Shin Hyun-sung, the Governor of the Bank of Korea, is set to meet with domestic bank presidents for the first time since taking office. With both the benchmark and market interest rates on the rise, discussions are expected to focus on the funding burdens faced by banks and trends in household lending.
According to the financial sector, Governor Shin will hold a dinner meeting at 6 p.m. on September 28 at the Bank Hall in Jung-gu, Seoul, with the presidents of 23 banks affiliated with the Korea Federation of Banks. This marks the first official meeting between the governor and bank leaders since Shin's appointment in April.
Since taking office, Shin has concentrated on understanding internal operations through departmental reports and staff interviews. This dinner is significant as it provides an opportunity to hear firsthand about the financial market situation and the perspectives of bank executives.
The banking sector is particularly concerned about the impact of recent interest rate hikes on lending and funding. The Bank of Korea raised the benchmark rate by 0.25 percentage points in both July and August, bringing it to 3.00% annually. As market interest rates also rise, there is increasing pressure on the costs of funding through bank bond issuance and mortgage rates.
Banks must also consider the repayment burdens on borrowers and indicators of financial health, such as delinquency rates, in light of rising loan interest rates. A banking sector official stated, "As household loans increase and interest rates rise, the burden of delinquency and other financial health indicators will inevitably grow. This meeting will allow us to gauge how much the bank presidents can respond to these challenges on the ground."
Since the meeting will take place in a dinner format, it remains unclear whether specific policies or adjustments to loan interest rates will be discussed. The banking sector anticipates that Governor Shin will focus on listening to the opinions of bank leaders regarding the current financial market situation.
* This article has been translated by AI.
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