Will the 30 trillion won in increased lending capacity due to easing household loan regulations calm the 'loan open run'?

The Ministry of Finance and Financial Supervisory Service will convene financial institutions on July 19th to adjust the total amount of loans for each institution. This "loan opening ceremony" is expected to address the ballooning amount of 30 trillion won in new loan capacity. The recent surge in loan defaults has put considerable strain on the financial system.

The government aims to mitigate the impact by allocating specific types of loans, such as purchase loans for first-time homebuyers, mid-sized loans, and emergency funds, separately from the total loan targets. This way, the total of 30 trillion won can be better managed. The government encourages financial institutions to prioritize housing-related loans, which are crucial for promoting housing supply.

The Ministry of Finance and Financial Supervisory Service suggests that the majority of the additional loan capacity should be allocated to housing mortgage loans. This would allow existing homeowners to take out additional loans while keeping the overall debt manageable for both the borrowers and the financial system.