[Next week’s economy] Has household lending in the financial sector increased again?

Next week (November 9-13), the Bank of Korea and financial authorities will announce the status of household loans in the financial sector last month.

It is expected that a plan to improve the governance structure of financial companies to eradicate the 'corrupt inner circle' in the financial sector, which President Lee Jae-myung pointed out, will be made public after a long discussion.

On the 11th, the National Data Agency will announce the October employment trend report.

Attention is being paid to whether there will be any changes in the rate of increase in the number of employed. The number of employed people in September increased by only 113,000 from a year ago, falling short of the government's forecast for an increase in the number of employed this year of 150,000.

The employment situation of young people is also a key issue. The number of employed people aged 15 to 34 in September decreased by 98,000 from a year ago.

The Ministry of Finance and Economy will publish the November issue of ‘Recent Economic Trends’ (Green Book), which contains a diagnosis of the overall Korean economy, on the 13th. In the October issue, it was analyzed that "Recently, our economy continues to see a solid economic recovery trend, with exports increasing significantly, investment showing a healthy increase, and consumption improving slightly."

In response to the sharp drop in domestic stock prices amid concerns that artificial intelligence (AI) data center regulations will be strengthened after the recent U.S. midterm elections, securities firms will be exempted from the obligation to maintain credit loan collateral ratios for three months from the 9th.

Currently, securities companies are required to maintain more than 140% of the credit loan amount as collateral, but this measure is taken based on the judgment that such regulations may cause excessive counter-trading and amplify market volatility when stock prices are falling.

The Bank of Korea announces financial market trends for October on the 11th.

Household loans from the entire financial sector decreased by 2.2 trillion won in September. It was the first net decline in nine months since December last year (-1.2 trillion won).

However, there is a possibility that it may have increased again in October.

The household loan balance of the five major banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) at the end of October was KRW 783.657 trillion, an increase of KRW 2.7717 trillion from the end of the previous month.

The Bank of Korea's Monetary Policy Committee also froze the base interest rate on October 26 and analyzed, "Household loans declined as other loans were repaid on a net basis, but housing-related loans continued to increase."

The Bank of Korea will release the export/import price index and trade index for October on the 13th.

In September, despite the decline in the won/dollar exchange rate, the import price index rose for the first time in four months due to the rise in international oil prices.

The party and government are expected to discuss and announce a plan to improve the governance structure of financial companies on the 12th.

The improvement plan is expected to include a plan to gradually strengthen the voting requirements for the executive candidate recommendation committee (appointment committee) and general shareholders' meeting as the number of consecutive terms for the financial holding company chairman increases. It is reported that the chairman of the appointment committee, who recommended the candidate for the chairman of the financial holding company, directly explained the reason for recommending the candidate at the shareholders' meeting, and also included a plan to apply the accountability structure to the chairman of the appointment committee.

Improving the governance structure of financial companies has been promoted by the authorities to eradicate the problem of the 'corrupt inner circle' in the financial sector, which President Lee pointed out. The original goal was to come up with an improvement plan by March of this year, but it has been postponed until now.

Lee Chan-jin, head of the Financial Supervisory Service, will hold a meeting with CEOs and experts from eight accounting firms responsible for external audit of listed companies on the 10th. We share future supervisory directions to improve trust and accounting transparency in the capital market and listen to industry suggestions.