The LTV regulatory policy was adopted for improving asset soundness of financial institutions by FSC in 2002. Administrative rule made by FSC also states that aims. But, it is a current picture to use tightening or easing the LTV regulation as an instrument which affects macro economy at large as well as real estate sector.

The purpose of this study is to check up on coinciding with aims in statute and operation of reality through empirical analysis at this time over 13 years after bringing in the regulation system. It proved that easing the LTV regulation affects improving a soundness indicator of banking institutions, NPL ratio and BIS ratio, on the contrary. It means on other way that tightening the LTV regulation brings about lowering the soundness. Those paradoxical phases comes from reverse effect that tightening(or easing) of the regulation causes decreasing(orincreasing) loans each.

On the other hand, it affected the policy variables of central bank, total currencies and interest rate, normally. Further more it has a significant description capacity. These results implies that it is necessary to rebuild regulatory governance of LTV policy.