▲ People Power Party Representative Jang Dong-hyuk speaks at a Supreme Council meeting held at the National Assembly on July 9.
The People Power Party (PPP) focused on highlighting the government's policy failures today (July 9), identifying single-stock leveraged exchange-traded funds (ETFs) as the primary culprit behind the recent volatility in the domestic stock market.
Representative Jang Dong-hyuk said at a Supreme Council meeting held at the National Assembly today, "I am worried that this could turn into a 'Black Everyday.' As stock prices repeat sharp surges and plunges, the fear of forced liquidation is gripping the market," adding, "The biggest victims are retail investors who engaged in 'debt-financed investment' by trusting the government."
He further argued, "The culprit that turned the stock market into a gambling den is the single-stock leveraged ETF. Even though many experts warned of the risks from the beginning, it was pushed through ahead of the local elections. These are things that could not have happened without the President's directive. This requires an investigation, not just an audit. We must thoroughly uncover the introduction process, from the Blue House to the Financial Services Commission and the Financial Supervisory Service."
Floor Leader Jeong Jeom-sik also pointed out, "The bigger problem than the drop in the stock index itself is the abnormal volatility. The term 'sidecar,' which is triggered when stock prices fluctuate sharply, has become a common occurrence in our stock market. It was triggered a total of 6 times from 2000 until last year, but it has already been triggered 6 times this year alone."
He continued, "It is no exaggeration to say that the stock market has gone beyond a crypto market to become a casino gambling den. Many experts point out that single-stock leveraged ETFs have further amplified this abnormal volatility. The Lee Jae-myung administration and the Democratic Party were busy boasting about the rise of the KOSPI as their achievement, but the moment you mistake luck for skill, such a fatal crisis arrives."
He urged, "I hope they will now focus on stock stabilization policies to resolve excessive leveraged investment and the concentration on specific stocks, without unreasonable market plans."
Chief Spokesperson Choi Bo-yoon issued a commentary, directly stating, "The Lee Jae-myung administration is the culprit behind this absurd situation where foreign media are mocking the Korean stock market as a 'casino' and 'Squid Game'."
She pointed out, "They neglected the overheating where one-fourth of the total ETF trading volume was concentrated in single-stock leveraged ETFs, and eventually, this led to a catastrophe where the shaking of individual stocks swallowed the entire market."
She also claimed, "It is by no means a coincidence that stock prices began to fall in earnest immediately after the announcement of the 'Honam Semiconductor Project.' The market did not accept the policy intended for show as a favorable factor, but as a major negative factor that infringes on corporate autonomy."
Two-term lawmaker Park Soo-young also issued a press release regarding the introduction process of single-stock leveraged ETFs, emphasizing, "The goal of the Lee Jae-myung administration was the launch of products and the boosting of stock prices before the local elections. We must transparently reveal the background and decision-making process behind the Lee Jae-myung administration's reckless launch of these products, even through a parliamentary investigation."
Previously, Financial Supervisory Service Chairman Lee Chan-jin said at a regular press conference on June 22 regarding the introduction of single-stock leveraged ETFs for Samsung Electronics and SK Hynix, which were pointed out as the culprits of the stock market volatility, "I am personally reflecting on whether I should have laid down on the floor to stop it," effectively admitting to a policy failure.
(Photo: Yonhap News)
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