South Korean experts saw the housing market slump as the biggest systemic risk facing the local financial market, a central bank survey showed on Wednesday.

According to the Bank of Korea (BOK) poll of 76 experts conducted on April 5-17, respondents selected the real estate market downturn as the biggest risk factor for the financial system.

The housing market slumped in the wake of rapid interest rate hikes. The BOK hiked its key rate since August 2021 by 3.0 percentage points in back-to-back steps to 3.50 percent in January this year.

Other major systemic risks were the increased insolvency risks of companies caused by the worsened business and financing conditions, and the higher volatility in the domestic financial and foreign exchange markets.

Of the external risk factors, the prolonged U.S. monetary policy tightening was picked as the biggest risk.

The housing market slump, the corporate insolvency risks and the higher financial market volatility were highly likely to cause financial systemic troubles within one year.

Household debts were highly likely to make the financial system risks a reality in one to three years, the poll showed.

Source: Xinhua Finance Agency