This undated picture shows the Bank of Korea headquarters in Jung District, Seoul. Courtesy of Bank of Korea

High household debts and expected policy changes under a new Donald Trump administration are major systemic risks facing Korea's financial system, a poll by the central bank showed Thursday.

According to the survey of 78 financial and economic experts about risk factors for the financial system, 26.9 percent, the largest share, pointed to surging household debts and growing burdens of repayment as a No. 1 issue of concern.

One in five respondents, or 20.5 percent, cited potential changes in U.S. policy measures under Trump as a major risk factor, followed by 9 percent mentioning the impact of major economies' pursuit of industry policy that prioritizes national interests of their own.

The respondents also said weak domestic demand and difficulties of the self-employed and small businesses are feared to pose a threat to the domestic financial system.

The survey was conducted by the Bank of Korea earlier this month.

In the third quarter of 2024, household credit rose by the most in three years to stand at 1,913.8 trillion won ($1.37 trillion) on a marked increase in mortgage loans.

The figure logged the largest for any quarterly tally since 2002, when the BOK began compiling the relevant data.

Last month, the BOK lowered its benchmark interest rate by a quarter percentage point to 3.25 percent in a first monetary policy pivot in more than three years on easing inflation and sagging domestic demand.

But it remains cautious about monetary loosening amid concerns about rising home prices in Seoul and the surrounding area and household debts, officials have said. (Yonhap)