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Saturday, April 23, 2011

South Korea: Debt Bomb...........

sounds like america.......from the korean herald..........


The Korean economy is sitting on a ticking time bomb ― household debt that has topped 800 trillion won. To figure out the risks that this huge debt bomb poses to the national economy, one has only to remember that one percentage point hike in interest rates would increase the interest payment burden on households by 8 trillion won a year. No wonder the Bank of Korea has been hesitant to raise the key rate despite growing inflationary pressure.

To prevent the debt bomb from detonating, officials at the Financial Supervisory Commission have been racking their brains since January. They said they would come up with a comprehensive package in May. But prior to that, they disclosed part of the package on Monday, which was aimed at protecting low-income earners, the most vulnerable group to any attempt to curb debt growth.........read it here

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