Financial Authorities Call for Emergency Meeting of Financial Sector Association Heads Following President Lee Jae-myung's Warning on 'Interest Play'
Amid President Lee Jae-myung's warning about financial institutions engaging in 'interest play,' financial authorities have urgently gathered the heads of all sectors’ associations to discuss measures for expanding investments.
The new government has begun to put its policy direction into action, aiming to redirect funds concentrated in unproductive areas towards more productive sectors.
On the 27th, according to financial authorities and the financial sector, the Financial Services Commission, chaired by Vice Chairman Kwon Dae-young, will hold a meeting on the 28th with the heads of major financial sector associations, including the Korea Banking Association, the Life Insurance Association, the Non-life Insurance Association, the Credit Finance Association, and the Korea Financial Investment Association. This meeting was arranged as an emergency event to gather opinions from the financial sector following President Lee Jae-myung's remarks, which were not initially scheduled.
President Lee emphasized at a senior secretary meeting on the 24th that “rather than becoming fixated on easy mortgage loans, I hope financial institutions will also pay attention to expanding investments,” stating, “This way, the pie of the national economy will grow, allowing financial institutions to develop and grow healthily.”
Expectation for Expanded Investments in Future Industries, Ventures, and Capital Markets as Call for Transition to Productive Finance
During this meeting, the Financial Services Commission is expected to emphasize the necessity for the financial sector to shift away from the traditional business model reliant on interest margin and transition to 'productive finance.' It is anticipated that three key areas—future industries, ventures, and capital markets—will be suggested as primary investment focuses.
The message is likely to convey that abundant funds from the financial sector must flow into national future growth areas, such as artificial intelligence (AI) technology and advanced ventures.
From the financial sector's perspective, the recent household loan regulation on June 27 has halved the supply target, necessitating the exploration of new revenue sources, including corporate loans.
Active participation from the financial sector is also expected in the government's current plan for a '100 trillion won National Fund.'
The government plans to establish a fund of 100 trillion won to support advanced strategic industries such as AI, bio, and energy, reviewing a method of expanding the scale through a master fund of 50 trillion won, matching funds from the financial sector and general citizens.
Additionally, as the Financial Services Commission has recently been actively implementing support measures for small business owners and the self-employed, plans to expand funding for these groups will also be discussed.
A Financial Services Commission official stated, "Since the launch of the new government, expectations and demands for the financial sector have increased," explaining, "Funds should flow into more productive areas rather than remain in housing mortgage loans." He continued, "The aim is to consider together what the financial sector can do, and the government will also seek ways to support the efforts of the financial sector."
Image source: President Lee Jae-myung speaks at a Cabinet meeting held at the Yongsan Presidential Office in Seoul on the 22nd. (Provided by the Presidential Office) July 22, 2025 / News1. President Lee Jae-myung listens to participants speaking during a town hall meeting 'Listening to the Heart of Busan' at Pukyong National University in Nam-gu, Busan on the 25th. (Lee Jae-myung's SNS) July 26, 2025 / News1.
