Bank of Korea Warns Growing Financial Imbalances Imperil Economy
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Deepening financial imbalances in South Korea due to rapid asset price gains and excessive borrowing threaten to hurt the economy, the central bank said.
Such imbalances could impact the economy negatively if there’s a shock triggering a correction in the asset market and a rapid deleveraging of debt, the Bank of Korea said Tuesday in a semi-annual report on financial stability. Korea is facing larger mid-to-long term financial risks than it did before the pandemic, it said.