Seoul: High household debts and anticipated policy changes under the administration of Donald Trump have been identified as significant systemic threats to South Korea's financial stability, according to a recent poll conducted by the country's central bank. The survey highlighted these concerns as part of a broader examination of risk factors impacting the nation's financial system.According to Yonhap News Agency, the survey, which gathered insights from 78 financial and economic experts, revealed that 26.9 percent of respondents identified soaring household debts and the increasing burden of repayments as the primary issue of concern. Additionally, 20.5 percent of participants pointed to potential shifts in U.S. policy under Trump as a substantial risk factor. Another 9 percent of respondents expressed concerns over the impact of major economies prioritizing national interests through their industry policies.The findings also indicated that weak domestic demand and challenges faced by self-employed indi viduals and small businesses could pose threats to South Korea's financial system. The survey was carried out by the Bank of Korea earlier this month.In the third quarter of 2024, household credit experienced its most significant rise in three years, reaching 1,913.8 trillion won (approximately US$1.37 trillion), driven by a notable increase in mortgage loans. This figure marks the largest quarterly tally since the Bank of Korea began compiling such data in 2002.Last month, the Bank of Korea lowered its benchmark interest rate by a quarter percentage point to 3.25 percent. This adjustment marked the first monetary policy shift in over three years, prompted by easing inflation and declining domestic demand. Despite this, officials remain cautious about further monetary easing due to concerns about rising home prices in Seoul and its surrounding areas and escalating household debts.
- October 12, 2026
