Business News

Seoul bank regulators guarding against new real estate bubble

Jun 30, 2009, 8:01 GMT

Seoul - South Korea's central bank said Tuesday it would guard against too much liquidity flowing into the real estate market, as the economy shows signs of recovery. The business outlook is improving among South Korean companies and inventories are low, leading to resumed investment, the central bank said in a statement Tuesday. 'When the economy recovers and money markets stabilize, it can cause money flow to be tilted. We will prevent liquidity from moving excessively to real estate market,' Kim Jong-Chang, head of Financial Supervisory Service, said. A string of interest cuts and government spending has increased liquidity, some of which is believed to have flowed back into the regulated real estate sector. Since the end of 2008, the government and banks partnered to subsidize cheap loans for export-oriented small and medium sized enterprises. After short-term lending ran its course, banks began turning back to home loans in response to rising demand. 'Money is plentiful, and it should find where it should go,' a manager at Hana Bank in Seoul said. 'The housing sector has begun to regain some of its old glamour in certain districts.'

Business News

Seoul bank regulators guarding against new real estate bubble

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