Korea's household credit risk hit the second-highest record for the upcoming third quarter, driven by impacts of the global pandemic which has reduced income for many households struggling with debt.
On July 13, Bank of Korea released a ‘Senior Loan Officer Opinion Survey on Bank Lending Practices’ which placed the third quarter (July to September period) household credit risk index at 43. The index range is set between minus 100 and 100, with the number edging closer to 100 if there are more predictions of increased risk compared to reduced risk against the previous quarter.
This is the second-highest figure since reaching an all-time high index value of 44 during the third quarter of 2003, 17 years ago when Korea was hit by the credit card bubble, also referred to as the plastic bubble.