Page 252 - 2019 6th AFIS & ASMMA

Congratulatory Remarks
Sungho Lee
Standing Commissioner at Financial Services Commission
Distinguished guests, good morning. I am Standing Commissioner
Sungho Lee of the Financial Services Commission.First and foremost,
please allow me to express my sincere congratulations on the convening
of the 6th Asian Fixed Income Summit. The Asian Fixed Income Summit
has emerged into a strong financial network among eight institutions,
spurring cooperation for development of housing finance markets
across the globe. This summit holds special significance as it provides a
platform on which housing finance experts from all over Asia can come
together to share ideas and discuss housing finance related matters, such
as securitization, reverse mortgages, and more.
I would like to express my sincere gratitude to CEO Jung Hwan Lee
of Korea Housing Finance Corporation for organizing this meaningful
event in the beautiful city of Busan, expert panelists for the fruitful
presentations and discussions, and Mayor Geodon Oh of Busan and
distinguished guests for gracing today's event with their presence.Korea
has witnessed impressive qualitative and quantitative growth in housing
finance over the past decade.
The qualitative structure of loans has improved, with most of them
now long-term, fixed rate loans. Accordingly, the total origination of
home-backed loans leaped from 14 trillion won in 2007 to 118 trillion
won in 2018. Mortgage-backed securities issued by the KHFC has not
only grown in size, but also has achieved qualitative growth, now highly
praised for its social value.
It was certified as a Social Covered Bond, a name given only to bonds
issued for funding projects that create social value. KHFC has also
successfully issued euro-denominated social covered bonds last October
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as the first Asian country ever to do so. The size of reverse mortgages,
which provide post-retirement income to the elderly by converting their
home ownership into a cash flow, has only continued to grow. Pension Ceremony Opening
payouts have, for the first time, topped 1 trillion won, benefiting more
than sixty thousand households. Trophies are shiny, but we cannot stay
complacent.
We still have a large share of loans that are exposed to interest rate
risks, which pushes us to continue to work on improving the interest rate
structures of loans. The financial authorities are planning to provide a 20
trillion won worth of "Inclusive Relief Loans", which leverages the MBS
issuing abilities of the KHFC to convert floating or semi-fixed rate loans
into fixed-rate loans. With this, we believe we can ease the borrowers'
burden of repayment, while also shielding them from interest rate risks.
Another challenge Korea's housing finance faces is the unprecedented
speed in which aging is taking place in the Korean society. With aging
in place, Korea is witnessing a fall in the consumption capacity of the
elderly, hence a fall in economic vitality, which then is weighing down
as a burden on welfare programs. Reverse mortgages should also be
adjusted in line with such changes; increasing the beneficiaries, easing
the conditions for applicants, thereby more actively complementing
public pensions.In particular, it is worth reviewing measures to increase
the payouts to reverse mortgage borrowers by increasing securitization
that KHFC is currently performing.
The UN declares that the right to adequate housing is a basic human
right, and advises all governments to strive to ensure the right to housing
for all. I sincerely hope today's summit will provide a meaningful time
to gather ideas to provide everyone with resident stability. I will keep
the constructive and innovative cases to be brought up later today in
mind, and actively apply them in devising Korea's housing finance and
securitization policies. Thank you.
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