There was a dramatic growth in household debt in the US preceding the recent Great Recession and high level of household debt was viewed to amplify the severity of economic recession in the US constraining consumer spending. In this context, high and continuously rising household debt could be a potential risk factor for the South Korean economy. Macroprudential policy, which indicates policy aims to reduce financial systemic risk pre emptively, is a crucial measure to slow down the pace of household debt growth in South Korea.
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