During the first two months of 2016, the ECCK President Jean-Christophe Darbes will be making weekly contributions to Maekyung Business News opinion column. Each week, the Chamber will share the published article as well as its English translation. Please click here to access President Darbes’ third article and read below for the English version: Household Debt and Institutional Solutions High household debt is often pointed out as the Achilles’ Heel of the Korean economy. In particular, housing price – including the soaring amount of key money deposit (“Jeon-se”) has been a main culprit of this malaise. The increasing debt has not only an economic impact but also leads to profound social consequences. Behind the recent trend of low marriage and birth rates, there are difficulties in finding and funding a place for a family to live. In Korea, real estate has long been considered as an investment opportunity rather than for actual residence. For this reason, the government has focused on preventing speculation by imposing strict regulations, reducing incentives for the financial industry to develop varied instruments – intentional or not. In recent years, however, the property market has begun to show some signs of change. Today in Korea, it is ironic to see many carefully designed regulations increasingly become obstacles to risk management, which had once served to stabilize the market. For example, it is common to see 20- or 30-year-mortgage home loans in Europe, the USA, and Japan. The loans could be converted to reverse mortgage payment after the redemption period, which provides home owners with financial security after retirement. Furthermore, the majority of mortgagors purchase credit insurance in tandem with mortgage loans in case of emergency. In Korea, however, such a financial structure has been out of reach due to a different perception of the real estate market and regulations unfavourable towards credit insurance. The consequence is a higher risk burdened by individual mortgagors and their family members, who may risk losing their home and deposit when faced with accidents or an unexpected death of the mortgagor. It is often the case that businesses want deregulation. Nonetheless, rules and regulations are necessary as long as they reflect the needs of the market and the society. In Korea, we currently see regulations falling behind economic and societal developments. More than a decade ago, I can recall France was faced with a similar challenge of low birth rates. In addition to direct measures to counter the problem such as accepting more immigrants and giving financial incentives for childbirth, the government made a great deal of effort to re-design its financial system to lower the housing price. In that perspective, the recent trend of active deregulation by the government is more than welcomed.