[Korea Financial News] rate cuts populist election promises botmul intellectual
Cause naemoneun 'balloon effect' illegally Private Financing
Upcoming May, ahead of the presidential election which pours the leading presidential candidates in the competitive jugetdaneun to ease the burden of household debt while ordinary cause 'highest court moneylender interest rates (the highest rate) cuts' commitments. In the Democratic primary candidate Moon Jae-camp, with the current run lead in various opinion polls it was announced some time ago the best motivation commitment term interest rates down step by step to 20% within a year.
It is continuously lowered with the highest domestic interest rates low interest rates reached 66% in 2002 to open and maintain an annual 27.9 percent in March 2016.
Nevertheless, the highest rate of current claims there is no reason 22 times higher than the basic annual interest rate of 1.25%, the Bank of Korea, and Japan have maintained the highest rate of 20 percent did not we make.
In addition to the maximum interest rate sensitive loan market continues to grow, there is still deotbutyigo also argued that the potential to make the highest interest rates.
But when viewed through such theoretical research and empirical examples excessive highest interest rate cuts overseas, rather than the effect of easing the burden of interest it makes it difficult for people to finance their approach.
Loan Finance Association, Korea was the so-called credit ratings than 7 customers after the actual sharply last year lowered the top rate to 27.9 percent, according to which a contrast to the period 4-6 User ratings for CITIC same increase. Meanwhile, it is best not to shrinking sales of large lenders cut interest rates analyzed because there was basically the funding of the interest rates being cut, the funding needs of the populace increased under economic long-term recession lenders will be lending selectively, do. Including lenders ordinary people are excluded from the institutional, financial institutions are faced with a situation not but immediate access to illicit markets of Private Financing of the ring.
However, these side claiming the highest interest rate target is considering a plan to expand the welfare and expand the junggeumri loans through the financial policy people.
However, long-term economic recession of the massive scale of the tax increases necessary to the welfare fund are expected to be formidable even tax resistance is not easy Welfare moral hazard by itself implies a problem in addition it is difficult to overcome. As well as junggeumri loan itself can be achieved primarily by CITIC Limited mainly because users have basically limits exist due to the guarantee insurance scale.
The role of the Internet in junggeumri loan of professional banking market to be created in infrastructure and institutional support is seen as a greater likelihood of international experience in the niche market limited. Because of the side effects of the highest interest rates and against the world's best unreasonable interest rates. Japan is an illegal issue of Private Financing punctuated with the highest interest rate cuts the mid-2000s, as financial deepening polarization and economic problems as well as increased political and even social unrest.
It has now been neutered voice that rather than raise interest rates again in the highest political circles. Such as the United States and Britain are reluctant to actively enforced for fear of side effects through a variety of theoretical analysis and global experience, including cases before the highest interest rate settings. While the highest rates in the World Bank under the CGAP (The Consultati ve Group to Assist the Poor) organizations rather adhere to the poor and adversely affects its stance communities oppose excessive highest rate setting.
Moreover, now is not to discuss the economic situation, the highest interest rate. While the end of 2016 as part of the base rate of the US exit strategy has started to raise key interest rates at home and abroad show a steep rise. Not long ago, the US Federal Reserve said it will raise interest rates three times in the coming year 2019 with a rate hike. Situation that may not raise domestic interest rate is then liable greater potential to rise to greater funding costs of financial institutions, ordinary width.
In this yard if the highest rates are lowered by adding significantly to the ordinary financial institutions When you receive a fatal impact on the sales seem to not deal with the fact, 7 credit rating below.
Therefore, the best method of determining the best interest rate cut in more cautious required bars, South Africa (South Africa), we have presented two implications. South Africa's government is known to be well-run and the problem is bigger party established (effective in 2007), the NCA (National Credit Act) to improve the interest rate ceiling system in the direction of increasing price transparency to the highest interest rate levels.
Specifically, the South African Department of Commerce (DTI) is a consultative body composed of various financial professionals and industry people; and configuring (NCR National Credit Regulators). NCR, has the ability to access credit on credit availability, price and market conditions, performance and trends, compete, SMEs and economically weak credit industry is also observed for the credit industry, including the investigation. Commerce has reasonably determined by taking into account the economic conditions and the market situation through consultations with the South Africa's best interest NCR.
Less than one year up to 2017 for the short-term nominal interest rate for the loan is the first loan for additional loans of less than one year 05%, has decided to 03%. Although the scheme is considered a distant country part to learn in our current situation.
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