SEOUL, Nov. 20 (Xinhua) -- South Korea's financial experts picked massive household debts as the biggest systemic risk facing the South Korean economy, a central bank survey showed Monday.
According to the Bank of Korea (BOK) survey of 68 domestic experts conducted from Oct. 30 to Nov. 6, 35 percent of respondents said household debts are the economy's biggest systemic risk.
It was followed by geopolitical risks on the Korean Peninsula with 28 percent and the normalization of interest rates in major economies, including the United States, with 24 percent.
Three percent of respondents selected uncertainty in the real estate market as the biggest systemic risk.
The government under President Moon Jae-in announced a set of measures to control a speculative investment in the property market, while tightening standard for mortgage loans toward multiple home owners.
Household debts surged in recent years as the BOK cut its benchmark interest rate from 3.25 percent in July 2012 to an all-time low of 1.25 percent in June last year.
The previous government eased regulations on mortgage financing, inducing households to purchase new home with borrowed money.
The BOK was widely forecast to raise its record-low policy rate late this year or early next year. The bank froze the rate in October, but one of the seven-member policy board members claimed a 25-basis-point rate hike, heralding a rate hike in the near future.
