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sojusucks
Joined: 31 May 2008
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 Posted: Fri Aug 19, 2011 6:17 am Post subject: Banks limit loans to individuals |
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If you are trying to get a loan in SK, then you may be disappointed.
http://joongangdaily.joins.com/article/view.asp?aid=2940435
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Korea�s top commercial banks have temporarily suspended approval of most household loans in an effort to meet demands by financial regulators to reduce the country�s outstanding household debt, banks confirmed yesterday.
Nonghyup has completely stopped approving mortgages or loans on credit for the rest of August. Woori Bank has �drastically limited the loan qualifications of mortgages and loans on personal credit by closely scrutinizing the purpose of the loan and the borrower�s income,� said Lee Yong-gyu, spokesperson for the bank.
The drastic measure was the result of a large increase in new household loans despite the measures the government announced in June to lower household debt. |
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PatrickGHBusan
Joined: 24 Jun 2008
Location: Busan (1997-2008) Canada 2008 -
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| Posted: Fri Aug 19, 2011 6:27 am Post subject: |
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| This happened back here in canuckland a couple of years ago. The 2008 meltdown in realestate in the US opened some eyes and Canadian Banks tighened the rules for loans big time. |
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weso1
Joined: 26 Aug 2010
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| Posted: Fri Aug 19, 2011 9:22 pm Post subject: |
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I think everyone that runs a bank or is in charge of a country's finances should be forced to take a few economic courses. 
Household debt isn't the issue. Low spending is.
Korea's central bank rates are stupid low. About as low as the US. Which means the rate at which the central bank lends to commercial banks is also low. This means the rate at which banks lend to borrowers (individuals and companies) is also very low. Which makes it easier for people to pay back those loans and reduces the risk of personal default.
We need to give these loans to people (and extending the time frame in which their due) so people can spend more to keep the economy moving. When you buy a new TV, you're not just helping the store that sold it to you. There's a whole line of suppliers, manufacturers, distributors, sellers, and employees that also benefit from you and a few of your neighbors buying new TVs. Korea is lucky in that it doesn't have an income problem like America. But it does have a spending problem. In that they are not spending enough. This is Keynesian economics 101 people! Spend your way out of a recession!
The world psychology on economics is backwards. Which is the global economy looks like an EKG readout. People spend like crazy when times are good and then pinch and save in down turns. It should be the other way around. You should save when you can afford to save a good amount, so that in times of recession, you can maintain you current spending levels. This would "even things out" and we wouldn't be seeing so many of these high highs and low lows. |
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koreatimes
Joined: 07 Jun 2011
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| Posted: Fri Aug 19, 2011 10:19 pm Post subject: |
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| The world psychology on economics is backwards. |
If a few people are rich, then I agree with you. However, when there is a lot of people with a lot of money, you are going to see a tug of war between these gangs. I don't think you can compare the current situation with previous theories that were based on different circumstances.
| Quote: |
| Household debt isn't the issue. Low spending is. |
I don't think household debt or low spending are the issues. It's sharing that people are going to have to get used to. We no longer have individual options. It's time to learn to share needs and responsibilities. Cut costs by sharing. This doesn't mean spend less, it means stretch your dollar/won further. |
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drydell
Joined: 01 Oct 2009
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Wildbore
Joined: 17 Jun 2009
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| Posted: Sat Aug 20, 2011 9:57 pm Post subject: |
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| weso1 wrote: |
Household debt isn't the issue. Low spending is.
Korea's central bank rates are stupid low. About as low as the US.. |
Korea's benchmark rate is 3.25, the USA is .25
COMPLETELY DIFFERENT. |
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weso1
Joined: 26 Aug 2010
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| Posted: Sun Aug 21, 2011 2:15 am Post subject: |
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| Wildbore wrote: |
| weso1 wrote: |
Household debt isn't the issue. Low spending is.
Korea's central bank rates are stupid low. About as low as the US.. |
Korea's benchmark rate is 3.25, the USA is .25
COMPLETELY DIFFERENT. |
3.25 yearly. Which comes to .27 monthly. |
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nate1983
Joined: 30 Mar 2008
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| Posted: Sun Aug 21, 2011 6:39 pm Post subject: |
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| weso1 wrote: |
| Wildbore wrote: |
| weso1 wrote: |
Household debt isn't the issue. Low spending is.
Korea's central bank rates are stupid low. About as low as the US.. |
Korea's benchmark rate is 3.25, the USA is .25
COMPLETELY DIFFERENT. |
3.25 yearly. Which comes to .27 monthly. |
I have no clue why you prefer doing monthly rates (is this the CFA level 1?) but that makes the US monthly rate 0.02%. |
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nathanrutledge
Joined: 01 May 2008
Location: Marakesh
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| Posted: Sun Aug 21, 2011 8:04 pm Post subject: |
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| weso1 wrote: |
I think everyone that runs a bank or is in charge of a country's finances should be forced to take a few economic courses.
Household debt isn't the issue. Low spending is.
Korea's central bank rates are stupid low. About as low as the US. Which means the rate at which the central bank lends to commercial banks is also low. This means the rate at which banks lend to borrowers (individuals and companies) is also very low. Which makes it easier for people to pay back those loans and reduces the risk of personal default.
We need to give these loans to people (and extending the time frame in which their due) so people can spend more to keep the economy moving. When you buy a new TV, you're not just helping the store that sold it to you. There's a whole line of suppliers, manufacturers, distributors, sellers, and employees that also benefit from you and a few of your neighbors buying new TVs. Korea is lucky in that it doesn't have an income problem like America. But it does have a spending problem. In that they are not spending enough. This is Keynesian economics 101 people! Spend your way out of a recession!
The world psychology on economics is backwards. Which is the global economy looks like an EKG readout. People spend like crazy when times are good and then pinch and save in down turns. It should be the other way around. You should save when you can afford to save a good amount, so that in times of recession, you can maintain you current spending levels. This would "even things out" and we wouldn't be seeing so many of these high highs and low lows. |
I don't know where to begin, your post is riddled with errors.
The rate in Korea is much higher than America.
Koreans do have a spending problem - they spend too much. Articles every day about people getting in over their heads with bad loans and unscrupulous lenders.
Keynes was a moron. You can't spend your way out of economic troubles if you don't have the money. Plus, why would I try to spend my way out of a economic woes when I know my neighbors won't? Try Ricardo - he understood that humans are smart and will do what's in their best interest based on future expectations. Game theory about a century before game theory actually came out.
Seriously, I think YOU should join those CEO's and bankers in econ 101. |
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weso1
Joined: 26 Aug 2010
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| Posted: Sun Aug 21, 2011 8:46 pm Post subject: |
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| Keynes was a moron. |
This makes your argument invalid. The entire Western economic system is built on Keynesian economics. Sure you hot shot libertarians and conservatives try to tout Austrian economic theory, but when the poop hits the fan "we're all Keynesians now."
Spending doesn't work? Just how exactly did we get out of the Great Depression? Oh yeah, The New Deal and WW2 - both big time government spending projects. |
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nathanrutledge
Joined: 01 May 2008
Location: Marakesh
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| Posted: Sun Aug 21, 2011 8:57 pm Post subject: |
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| weso1 wrote: |
| Quote: |
| Keynes was a moron. |
This makes your argument invalid. The entire Western economic system is built on Keynesian economics. Sure you hot shot libertarians and conservatives try to tout Austrian economic theory, but when the poop hits the fan "we're all Keynesians now."
Spending doesn't work? Just how exactly did we get out of the Great Depression? Oh yeah, The New Deal and WW2 - both big time government spending projects. |
Well, since you know so much about us "hot shot libertarians and conservatives" (you do see the fallacy in grouping those two together, right?) you know that libertarians believe that Keynesian economics is what CAUSES the boom/bust cycle, right? You are also well aware, I'm sure, of the school of thought that says that the New Deal actually exacerbated the Great Depression? By setting price floors with a minimum wage, and price ceilings, prices became even stickier than what Keynes claimed was the problem in the first place.
I'll boil it down to this - every time we have a depression/recession, it's simply the market attempting to correct itself and reach equilibrium. Too many cars are manufactured, so the price drops until people buy all of them. If they don't need them/want them the price continues to drop and all of a sudden people lose their jobs making cars. Unfortunately, when the government gets involved, they stick a gun in face and demand more taxes so that they can offer rebates to people to buy cars, creating artificial demand for cars and depressing demand for things like graphic scat porno, which I would have gladly bought if the government hadn't stolen my money.
That's Keynes for you. Redistribute the wealth. Create artificial demand. Destroy real demand. All in the name of the business interests with the most pull. Keynes - what a brilliant guy. |
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