Why is the loan rate going up when the base rate has been cut?

■ Host: Anchor Yoon Bori and Anchor Park Ki-wan
■ Starring: Kim Dae-ho, Director of Global Economic Research Institute

* The text below may differ from the actual broadcast content, so please check the broadcast for more accurate information. Please specify [YTN Newswide] when quoting.

[Anchor]
The Bank of Korea lowered its key interest rate by 0.25 percentage points, but the commercial bank's mortgage rate went up. Let's take a look at when the effect of the rate cut will appear with Kim Dae-ho, head of the Global Economic Research Institute. How are you? Based on the four major banks, the lower end of the fixed interest rate on the mortgage loan rose to the 4% range. The benchmark interest rate has fallen for the first time in a long time, but the loan rate is rising. What's the matter with you?

[Daeho Kim]
The mortgage you just mentioned is the mortgage loan. Most households borrow money from financial institutions with their homes as collateral, which we often refer to as mortgage loans. Last week, the Bank of Korea lowered its benchmark interest rate for the first time in a long time. For the first time in 36 months, the Bank of Korea's benchmark interest rate, which has continued to rise for the first time in three years and four months and has been high, has fallen from 3.5% to 3.25%. With interest rates falling, many households will now have mortgage rates falling. I've been looking forward to it a lot. But a week has passed.

However, on the contrary, after the Bank of Korea lowered its base rate, commercial banks, the four major banks you just mentioned. KB, Hana, and other four major banks' loan interest rates have risen further. It's a phenomenon that doesn't usually happen. So the person who bought or signed a contract in anticipation of a fall in interest rates and expected a fall in interest rates seems to be quite embarrassed. Originally, the Bank of Korea's standard interest rate is a prohibition that sets the standard, an interest rate that is not directly related to customers on the market. The short-term interest rate for over-nights and shortages between the Bank of Korea and the four major banks, a financial institution, is called the base rate.

However, despite the Bank of Korea setting the standard this time, the four major commercial banks do not follow the standard and walk my way. As a result, people who expected a rate cut are quite shocking, so why does this happen? Fundamentally, even if the base rate is cut, there is a certain time difference until the market rate is cut. Because the main interest rate of commercial banks is the self-financing interest rate, the average of which is called COFIX, and the COFIX plus bank addition rate is set. It takes a certain amount of time for that interest rate to be adjusted according to the Bank of Korea's base rate.

That's the first factor, and the other is that the government is now strongly using credit regulation policies called DSR, unlike lowering the benchmark interest rate to prevent real estate overheating and household loans from increasing. In that sense, it can be seen that the two situations in which commercial banks are concerned about the government's inability to get off even if they want to, have led to a rise in interest rates.

[Anchor]
You told me that there is a time difference, but can this be applied in a few weeks?

[Daeho Kim]
Usually, it was reflected within a week until two or three years ago. Recently, the pattern has changed. First of all, the deposit rate has to be lowered. However, commercial banks are not lowering deposit rates. Because expectations that interest rates will be cut have already been reported from the U.S. Fed to the Bank of Korea, the central bank of Korea, to cut interest rates, many months ago, so there is a lot of shelf management. So this time, it will theoretically take about two months for the Bank of Korea's benchmark interest rate to come to the commercial bank's rate cut. In addition, if the government's loan regulations are strongly implemented now, and this does not weaken, it is expected that the effect of the base rate cut will be felt only after three to four months.

[Anchor]
It will take more time than I thought, but in this situation, I can't help but feel embarrassed because I raised the loan interest rate, but the deposit interest rate is not much different. That's why banks keep saying that they're doing interest business.

[Daeho Kim]
You pointed out the core of the problem. Since Korea's banks do not do what the government tells them to do, so-called government finance, they do what the government tells them to do, so when the government's policy comes out, it is convenient to raise the loan rate while leaving the deposit rate as it is, or if the deposit rate goes down, only banks do business more if the difference between deposit and loan rates increases. When interest rates go up sharply, when they go down, it's the same.

In this respect, even when the government regulates finance, the gap between bank loan-deposit margins and deposits and loans widens at the same time, which is an interest business for banks, but from the customer's point of view, their own blood escapes. We also need to look into that part. In fact, Financial Supervisory Service Director Lee Bok-hyun has emphasized several times that he will look into this section. It seems that such indirect control that is invisible to the government will be needed.

[Anchor]
In fact, the loan interest rate is rising, and as you said, the DSR is very tight. In this situation, jeonse transactions and sales are not active, so what do you think will happen to house prices in the future?

[Daeho Kim]
The rise in house prices is quite calming. Until just a month ago, housing prices continued to soar without knowing that they were too high. This regulation of the total debt repayment ratio called DSR and the correlation was very high. Initially, the government will not lend more than 40 percent of the burden when repaying their income by regulating DSR from July. We tried to implement this system from July, but we handed it over to September in consideration of the damage to the people caused by some rapid policy changes.

In the meantime, a huge amount of money was withdrawn between July and August. As a result, housing prices have risen a lot. Because this is a period of controlling the amount of money that has been withdrawn from that time, the supply of money through banks is expected to be lower than normal in September, October and November for the time being. So, at least for the time being, borrowing money from banks and investing in abundant money and liquidity can cause various disruptions. In that sense, will the interest rates fall vaguely just because the people who invest also lower interest rates? The financial burden is reduced. The time has come for real estate speculation. I don't think it's a simple situation like this.

[Anchor]
Let's talk about semiconductors this time. Samsung is shaking. Taiwan's TSMC will be given the No. 1 foundry spot again. This kind of observation is coming out.

[Daeho Kim]
Samsung Electronics is quite difficult these days. Samsung Electronics itself is apologizing to investors and the people. Foreigners have been saying, "Let's keep selling Samsung Electronics shares for more than a month or a day." The blue Samsung semiconductor sales you see in the picture is Samsung's sales.
It was bad last year and caught up with TSMC slightly in the second quarter of this year, and now we have Q3 results.

However, it was not classified by field, but most experts have already lost to TSMC. It's like this. In that table, TSMC has only one foundry. However, Samsung is a foundry, memory, post-process, entire process, and semiconductor sales. In total, TSMC only does one foundry. It was behind the TSMC. It's quite shocking. In terms of profit, Samsung Electronics' profit lags TSMC considerably behind TSMC, where TSMC's semiconductor profit has dropped by a third.

[Anchor]
In fact, the stock price was greatly shaken by the fact that Morgan Stanley would have a semiconductor boom. I think Samsung is the only one with a cold wave. In fact, SK Hynix, TSMC, and Nvidia are all performing well, so why is Samsung the only one doing this?

[Daeho Kim]
If you read Morgan Stanley or Macquarie's New York Stock Exchange investment banks in detail, they did not say winter was coming across semiconductors. Memory semiconductors and memory are simple memories. Demand for this semiconductor is decreasing now, and on the contrary, artificial intelligence is doing well. In the case of Samsung Electronics, it is leading in memory, but the memory that Samsung Electronics focuses on is not working. In addition, in terms of artificial intelligence, Nvidia is completely exclusive to the AI game semiconductor called GPU.

I couldn't get any in right now. And it is called HBM, which is commonly referred to as a high-band semiconductor that is in contact with memory and artificial intelligence semiconductors, but Nvidia has not even been able to deliver it because it failed there. In the same Korea, SK Hynix is doing quite well, and not only is it lagging behind TSMC globally, but Samsung Electronics is expected to give SK Hynix the No. 1 position in Korea this quarter or at least next quarter.

[Anchor]
As of June, there are an estimated 4.2 million minority shareholders of Samsung Electronics. Until about three months ago, I said I would go to 100,000 electronics, but now I'm staying at Oman Electronics. Is there any material for the rebound that we can expect?

[Daeho Kim]
Samsung Electronics' stock price once exceeded 100,000 during the day just a few months ago. That's why Samsung Electronics' nickname in the stock market was 100,000 Electronics. It will never go below 100,000 electrons again. But since then, it's dripping. As a result, those who bought it for 90,000 won and those who bought it for 80,000 won are very shocked. The ants are losing a lot. Now, the line that goes down from 60,000 won to 50,000 won has also been broken and is in the 50,000 won range. So now, the nickname is Oman Electronics, and Samsung Electronics is staggering.

When will Samsung Electronics get a day of sunshine? Samsung is a powerful company, so it will recover someday. However, in the past, Samsung Electronics' insolvency was mainly a business cycle, so the business cycle of a strong company like Samsung rose sharply if the economy improved a little. However, there is a possibility that the crisis of Samsung Electronics will deepen considerably in that the structural crisis is much greater.

Since Samsung Electronics has been in first place for so long, it has been used to the first-place constitution for a long time, so the first-place constitution makes it safe to be what it is and has some risks, but it doesn't make a lot of money. NVIDIA and TSMC did artificial intelligence semiconductors for that crisis choice. Samsung Electronics has been letting go of that line for the last five years.

Originally, HBM was the first thing Samsung Electronics did in the world, but it reduced and closed its HBM office because semiconductor memory DRAMs were better than that. In the meantime, Nvidia, TSMC, and SK Hynix went up. In that sense, Samsung Electronics needs a fundamental structural reform. Samsung Electronics is also well aware of this. So I also replaced the chairman.

The representative of semiconductors. Since we have recognized the problem now, if we take countermeasures from now on, we expect to catch up in the next six months to a year as it is a powerful company.

[Anchor]
Next Sunday, it will be two years since Chairman Lee Jae-yong took office. As you said a while ago, Vice Chairman Jeon Young-hyun and semiconductor reliever have even issued a semiconductor apology, so what position do you expect Chairman Lee Jae-yong to come up with this time?

[Daeho Kim]
In fact, it would have been difficult for Chairman Lee Jae-yong to intervene deeply in management in recent years due to judicial risks related to state affairs manipulation. In fact, he was also in the detention center for a long time. In that sense, I think you'll be very upset. However, since corporate management needs to be chosen by the owner of the chief executive company anyway, the market is waiting for Chairman Lee Jae-yong's decision and fundamental structural reform.

Samsung has been No. 1 and is a great company and has made a decisive contribution to the Korean economy, but a fundamental structural reform is needed to go one step further, and a bold choice of crisis at the chairman's level and the company's largest ownership. So even if you make a mistake, wouldn't it be possible to change the structure much faster if there was something like that that clearly suggests the direction of change? The market is now waiting for the winning move to be announced on the second anniversary of Samsung Electronics Chairman Lee Jae-yong's inauguration.

[Anchor]
I'd like to ask you this briefly. There is also a saying that one of the fundamental structural reforms should be handed over to professional managers who used to be engineers. What do you think of this part?

[Daeho Kim]
Chairman Lee Jae-yong is not a registered director of Samsung Electronics. Legally, you are not an executive unless you are a registered director. However, the resignation from the registered director was due to the manipulation of state affairs, and Chairman Lee Jae-yong's trial on the manipulation of state affairs is still not completely over. As a result, since he is out as a registered director, wouldn't he be less driven than the owner's direct management? Therefore, as Chairman Lee Jae-yong is not a technology expert, it is pointed out that there should be a change in the double-headed drum coach system with the CEO of the technology expert as Chairman Lee Jae-yong is a registered executive.

[Anchor]
Recently, in China, general-purpose memory semiconductors have been hitting Samsung's share, and ASML, a Dutch semiconductor equipment company, has also seen sluggish performance due to reduced sales in China. When China is having a big impact on semiconductor companies, do you think there is a possibility that the U.S. will fight back again?

[Daeho Kim]
The semiconductor war between the U.S. and China is in full swing and heating up. If President Trump is elected in the election, it is expected that a very powerful war that has not been seen before could break out. First of all, the U.S. is trying to implement a quota system for other countries to prevent the sale of Nvidia semiconductors to China, while China is responding to Intel's export to China by saying that it harms China's security.

This process can be both an opportunity and a crisis for the semiconductor industry in Korea. If you use it well, you can greatly increase exports while revealing Korea's presence in the U.S.-China semiconductor war, while if you line up incorrectly or act in a vague manner and are attacked as a bonus to either side, you can literally burst into a whale fight. In that sense, technology is important for semiconductors, but diplomacy in the U.S.-China trade war is also emerging as a very important task.

[Anchor]
In the midst of this, the won-dollar exchange rate has reached the 1,370 won threshold for the first time in two months. I think this will have an effect on the U.S. presidential election. What do you think?

[Daeho Kim]
That's right. Didn't the U.S. cut its benchmark interest rate now? The U.S. dropped by half a percentage point in the name of Big Cut faster and more quickly than we did. Interest rates are the price of money. Then, if the U.S. lowered interest rates, the U.S. dollar would fall, and on the contrary, if the Korean won's value rises, the Korean exchange rate would fall, making the Korean won strong. In fact, after the big cut, the exchange rate went up to 1310 won. However, in the meantime, the U.S. dollar is again strong and Korea's money is weak.

What happened? It seemed that the U.S. would continue to cut interest rates at a rapid pace after making a big cut, but the pace suddenly slowed down. In addition, as the anchor pointed out well, President Trump said, "I will not give you weak dollars." It's going to be a strong dollar. The strong dollar will raise all the world's money and block it with tariffs if there is a trade war, so the king dollar and the strong dollar now reflect the Trump shock. In that sense, it is also necessary to watch the impact of this presidential election on the global economy.

[Anchor]
In addition, the U.S. presidential election is 15 days away, and the dollar, a safe asset, is jumping and the coin market, a dangerous asset, is fluctuating. How do you think it will proceed this time?

[Daeho Kim]
Before the election, the pattern of the New York financial market, such as the strong dollar's Bitcoin and the U.S. government bond rate hike, is expected to continue. Once the election is over and the winner is decided, especially if Harris becomes Harris, it will return to the existing economic management pattern and return to the weak dollar. But if Trump becomes Trump, the era of dollar weakness or bitcoin could be a little bit longer, so here's what you can see.

[Anchor]
Let's stop here. It was with Kim Dae-ho, head of the Global Economic Research Institute. Thank you for talking today.