South Korea’s financial system remains broadly stable, but the Bank of Korea warned that imbalances are accumulating around Seoul metropolitan housing prices and household lending. Household credit exceeded 2,000 trillion won, while the Financial Vulnerability Index rose 0.8 points to 46.5 in the second quarter, extending its increase to nine consecutive quarters and matching its long-term average. The central bank said housing-related and other household loans accelerated, while vulnerable self-employed and household borrowers continued to show sharply higher delinquency rates than broader borrowers. It also identified regional divergence in property markets, elevated rental-market monthly-payment shares and sharp swings in stocks. The Bank of Korea said macroprudential and monetary policies should be coordinated, with risks remaining from vulnerable sectors, global monetary and fiscal policies, geopolitical tensions and changing expectations for artificial-intelligence investment.