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South Korean Party Slams Leveraged ETFs, Demands Top Official's Dismissal
🇰🇷 South Korea /Economy & Trade

South Korean Party Slams Leveraged ETFs, Demands Top Official's Dismissal

From Dong-A Ilbo · () Korean

Translated from Korean, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • The People Power Party criticizes the introduction of leveraged ETFs for Samsung Electronics and SK Hynix as a "worst decision" that turned the stock market into a "casino."
  • The party demands the dismissal of Kim Yong-beom, the Presidential Office's chief policy secretary, for allegedly driving the policy.
  • They blame the government's "dazzled" pursuit of high stock market figures for increased volatility and market instability.

South Korea's ruling People Power Party has vehemently criticized the introduction of leveraged Exchange Traded Funds (ETFs) focused on single stocks like Samsung Electronics and SK Hynix. The party labeled the decision a "worst decision" that has transformed the stock market into a "casino."

The introduction of single-stock leveraged ETFs for Samsung Electronics and SK Hynix was the worst decision, turning the stock market into an abnormal casino.

— Jung Jin-sukCriticizing the government's financial policies.

During a party meeting on July 14, floor leader Jung Jin-suk stated that the Kospi index plummeted nearly 9% the previous day, and the circuit breaker, which halts trading during sharp declines, has been triggered seven times this year. He accused the current administration of ignoring warnings about excessive market volatility, becoming "dazzled" by the Kospi reaching 5,000 points.

The party further alleged that the government actively fueled market instability. Jung cited a remark from a former Financial Services Commission vice chairman suggesting that "borrowed-money trading (bitu) can be seen as a form of leveraged investment," which they claim effectively encouraged retail investors to take on debt for stock trading. The introduction of leveraged ETFs for specific tech giants was deemed particularly reckless, leading to speculative funds flooding the market and causing significant fluctuations in major stocks.

The Presidential Office's chief policy secretary, Kim Yong-beom, cannot be entrusted with the fate of the Korean economy any longer.

— Jung Jin-sukDemanding accountability for market instability.

Park Sang-woong, deputy floor leader, echoed these sentiments, demanding the dismissal of Kim Yong-beom, the Presidential Office's chief policy secretary, whom he identified as the driving force behind the leveraged ETF policy. Park accused Kim of destabilizing both the real estate and stock markets, urging President Lee Jae-myung to hold Kim accountable and overhaul the economic leadership team.

The Korean economy is not the Democratic Party's playground. The lives and assets of the people are not subjects for the Democratic Party regime's policy experiments.

— Park Sang-woongExpressing strong opposition to the government's economic management.
DistantNews Editorial

Originally published by Dong-A Ilbo in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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