Ruling party seeks inquiry into ETF 'disaster,' demands official's dismissal

South Korea's ruling People Power Party is pushing for a parliamentary inquiry into the introduction of single-stock leveraged Exchange Traded Funds (ETFs), which they blame for recent sharp stock market fluctuations. The party argues that the government and ruling party allowed these "extremely risky products" with the aim of luring domestic investors back to the stock market, but the outcome has been disastrous.

Park Seong-hoon, the party's senior spokesperson, stated that the policy has turned the Korean stock market into a "huge gambling den" and a "playground for foreigners," causing domestic investors, known as "Donghak ants," to suffer significant losses. He criticized the opposition Democratic Party for attempting to distance itself from the issue, despite previously touting market gains as their achievement. The ruling party also demanded the dismissal of Kim Yong-beom, the Presidential Office's chief policy secretary, accusing him of evading responsibility and offering excuses.

"Kim Yong-beom, the policy secretary, is only making detached excuses like 'it's not just our market' and 'leveraged ETFs are not the only cause.' No one is taking responsibility," Park said. He added that 56.3% of the public are demanding Kim's dismissal over his role in the "leveraged ETF disaster." The party intends to use a parliamentary inquiry to investigate who pushed for the policy despite warnings and who has avoided accountability.

Choi Eun-seok, the party's deputy floor leader, further criticized the policy, noting that individual investors have left the domestic market, foreigners have filled the void, and the government has increased tax revenue. He highlighted that individual investors who borrowed money to invest, trusting the government's market-boosting policies, have suffered the most significant losses. Choi indicated that even within the Presidential Office, Kim Yong-beom's response to the ETF "disaster" has been met with cool assessments, making him an unwelcome figure. The party believes that if the Presidential Office's policy control tower cannot manage the real estate market, stock market, or people's livelihoods, it should take responsibility for policy failures rather than clinging to its position.