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Kim Seung-yu, head of Hana Financial Group.
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Top financial officer compares issue to 1997 financial crisis
Kim Seung-yu, head of Hana Financial Group, South Korea's leading financial institute, Tuesday warned of a potential bubble burst in the local real estate market. The remark is the first of its kind made by a top executive of a local banking firm, amid divided opinions among the government, media and, property sectors over the real and present danger of such a collapse in the housing market. "Currently, there is a bubble in the real estate market. We need to take the air out of the bubble gradually," Mr. Kim was quoted as saying at a private meeting. "A hard landing of the real estate market would deal a blow to the economy. So we need to take measures to ease the bubble slowly for the market to make a soft landing."Mr. Kim linked price hikes in the property market with experiences that South Korea had during the Asian financial crisis of 1997. Mr. Kim was serving as head of Hana Bank when the crisis hit. "Before the financial crisis, people in the financial sector saw [the danger] coming through many outside signals," Mr. Kim said. "They were afraid that something would happen, and unfortunately, their fears were confirmed." An official of Hana Financial Group said that Mr. Kim's remarks are personal opinions. "Even if apartment prices drop by 10-20 percent, it would not cause significant damage to local banks, considering their low loan ratio," the official said.
