S. Korea calls for lenders’ cooperation to lower borrowing costs

SEOUL  –South Korea‘s top financial regulator on Friday called on the country’s major banking groups to cooperate with the government’s efforts to help cut borrowing costs for vulnerable people.

“There have been efforts made in the financial sector to lower interest rates on new loans, but those efforts need to continue for more people to feel the change,” Financial Services Commission Chairman Kim Joo-hyun said during a meeting with the heads of the country’s five major financial groups.

Kim said financial companies should try to minimize spill-over effects on retail customers as much as possible amid rising interest rates in financial markets.

Despite recent bank troubles in the United States and Europe, the local financial industry and markets have remained comparably stable, thanks to preemptive and coordinated efforts by the government, central bank and the industry, he added.

The meeting was arranged because current monetary and fiscal policy and market conditions made it difficult to develop support measures for the vulnerable without help from financial companies, Kim told reporters after the meeting.

Earlier this week, the government announced a package of measures to boost domestic consumer spending, at a time when the trade-reliant economy is sliding toward a recession amid a slump in exports.

Kim also suggested the country would maintain strict restrictions on stock short-selling for some time by telling reporters that he could not say when the restrictions, which are in place to limit market volatility, would be lifted.