FSS chief-household debt

FSS chief voices regret over failure in timely responding to global tightening

SEOUL, Oct. 11 (Yonhap) -- South Korea's financial regulator on Tuesday expressed regret over failure in taking timely action against rising household debt amid global monetary tightening that has led to a sharp rise in borrowing costs.

"I share the disappointment that we had to make preparations for the possibility of quantitative tightening or interest rate trends in advance," Lee Bok-hyun, chief of the Financial Supervisory Service (FSS), told lawmakers during a parliamentary audit session.

He added that financial authorities had failed to recognize the urgent need to curtail household debt or change its composition for which he apologized.

Household debt has been emerging as a major risk factor for the local economy as borrowers are under a rising debt-servicing burden from fast-increasing interest rates amid global monetary tightening.

The Bank of Korea has hiked its policy rate seven times by a combined 2 percentage points since August last year to rein in inflation.

The central bank is widely expected to deliver another rate hike at a meeting Wednesday.

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