Ruling Party Proposes Parliamentary Probe into Stock Market Chaos

South Korea's stock market has experienced extreme volatility, prompting a call for a parliamentary investigation. Jung Jin-suk, the floor leader of the ruling People Power Party, proposed a "stock market chaos" parliamentary inquiry, highlighting a dramatic 16.17% plunge in the KOSPI index within just two days. He described the market's current state as abnormal, noting that a 17.91% surge on a single Friday also deviated from normal patterns.

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The KOSPI's drop in just two days by 16.17% is not normal, and neither is the 17.91% surge on Friday. Our stock market is currently abnormal. I propose a parliamentary investigation into the 'stock market chaos.'

Jung criticized the recent market conditions, stating that the KOSPI's decline in July alone surpassed the drop seen during the 1997 Asian Financial Crisis. He observed that circuit breakers and the "sideways" trading halt system, typically rare events, have become daily occurrences. This instability has led to a self-deprecating sentiment that it's difficult to distinguish the stock market from a casino like Kangwon Land.

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The KOSPI's drop in July alone was larger than during the IMF foreign exchange crisis. Circuit breakers and sidecars, which we see perhaps once a year, have become commonplace, leading to self-deprecating remarks that it's hard to tell if this is the stock market or Kangwon Land.

The floor leader further accused the government of exacerbating the market's volatility through its policies, which he claims have fueled overheating and increased uncertainty. He likened the situation to a "roller coaster" or even a "bungee jump," suggesting the government's actions have turned the stock market into a gambling arena. A significant concern raised is the potential impact on the stability of national pension funds, including the National Pension Service, which hold substantial public retirement assets. Jung asserted that if government intervention and policy failures have led to the erosion of these funds, accountability must be established.

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The government has only promoted overheating, further increasing the already high volatility and driving the Korean stock market beyond a 'roller coaster' to a 'bungee jump.'

The proposed parliamentary investigation aims to swiftly identify the causes and responsibilities behind the current market turmoil. Specific areas of inquiry include the introduction and impact of single-stock leveraged ETFs, government actions that encouraged market overheating, the controversy over excess corporate profits and the creation of semiconductor clusters, and the appropriateness of pension funds' domestic stock investments. The investigation will also scrutinize the roles of financial supervisory authorities and economic policy departments.

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The greater problem is whether the stability of pension funds, such as the National Pension Service, which holds the 'retirement funds of all citizens,' was properly protected in this process. If the instability of the stock market has increased due to the government's inappropriate intervention and policy failures, and if citizens' retirement funds have evaporated on a large scale, then serious responsibility must be demanded.