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Household debt vulnerability and directions for risk management
![I
“Korea’s households and banks seem relatively sound in terms of their loss-absorbing capacities. However, a number of worrying signs are present. Some of the negative indicators are the rising share of non-bank consumer loans; the large share of real estate out of household assets, borrowing in the form of short-term balloon payment loans, and the credit risk of low-income indebted households. Against this backdrop, a sound and effective risk management system needs to be designed based on a proper assessment of the current situation while differentiating normal from emergency measures and ex ante from ex post measures.”
Ⅰ. Introduction
Korea’s household debt continues to be a topic of ongoing concern for its size, growth rate, and compositional quality despite concerns expressed in the past. Compared to the major economies of the OECD, Korea has a large size of debt relative to income, and its growth rate has continued to be higher than that of income. Household debt has been
* This is the translated version of KDI FOCUS released on June 25, 2014. * This paper is an elaboration on the main points from Young-il Kim, “Household Debt Vulnerability and Directions for Risk Management: Analysis and Implications of the Household Asset-Liability Structure” in Man Cho, Identifying New Directions for Real Estate Policy at a Turning Point I, Vol. 7, Research Report 2013-01, Korea Development Institute, 2013.
KDI FOCUS
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[Figure 1] Trends in Household Loans from Bank vs. from Non-Bank](/image.do?type=idas&timeFile=/asset/2015/05/11/DOC/PREVIEW/04201505110138056035460.jpg "I
“Korea’s households and banks seem relatively sound in terms of their loss-absorbing capacities. However, a number of worrying signs are present. Some of the negative indicators are the rising share of non-bank consumer loans; the large share of real estate out of household assets, borrowing in the form of short-term balloon payment loans, and the credit risk of low-income indebted households. Against this backdrop, a sound and effective risk management system needs to be designed based on a proper assessment of the current situation while differentiating normal from emergency measures and ex ante from ex post measures.”
Ⅰ. Introduction
Korea’s household debt continues to be a topic of ongoing concern for its size, growth rate, and compositional quality despite concerns expressed in the past. Compared to the major economies of the OECD, Korea has a large size of debt relative to income, and its growth rate has continued to be higher than that of income. Household debt has been
* This is the translated version of KDI FOCUS released on June 25, 2014. * This paper is an elaboration on the main points from Young-il Kim, “Household Debt Vulnerability and Directions for Risk Management: Analysis and Implications of the Household Asset-Liability Structure” in Man Cho, Identifying New Directions for Real Estate Policy at a Turning Point I, Vol. 7, Research Report 2013-01, Korea Development Institute, 2013.
KDI FOCUS
2
[Figure 1] Trends in Household Loans from Bank vs. from Non-Bank")
| Title |
Household debt vulnerability and directions for risk management
Similar Titles
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|---|---|
| Material Type | Reports |
| Author(English) |
Kim, Young-il |
| Publisher |
Sejong-si : Korea Development Institute |
| Date | 2015-05 |
| Series Title; No | KDI Focus / 41 |
| Pages | 12 |
| Subject Country | South Korea(Asia and Pacific) |
| Language | English |
| File Type | Documents |
| Original Format | |
| Subject | Economy < Financial Policy |
| Holding | KDI; KDI School |
| License |  |
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