"Illusion That Market Correction Is Due to Leverage… It Is Our Duty to Supplement"

[Anchor]

President Lee Jae-myung has ordered the preparation of countermeasures regarding Single-Stock Leveraged ETF products, which have been pointed out as a cause for increased volatility in the stock market. While noting that the timing of their introduction during a market correction phase may have created an illusion that the problems were more severe, he emphasized that it is the government's duty to create supplementary measures.

Reporter Park Yerim has the story.

[Reporter]

Presiding over a cabinet meeting, President Lee Jae-myung brought up investor complaints regarding Single-Stock Leveraged ETF products based on assets such as Samsung Electronics or SK Hynix.

[President Lee Jae-myung: There is criticism that this has deepened the adjustment, or some sharp declines, following the rapid rise in stock prices.]

He mentioned that there are two sides to the argument: that it has "deepened stock market instability" and that it has "had the effect of reducing foreign exchange outflows."

[President Lee Jae-myung: It actually intensifies and exacerbates the rise during an upturn, and deepens the decline during a downturn.]

Regarding the recently announced supplementary measures by financial authorities, such as raising deposit requirements, he commented as follows.

[Lee Eok-won/Chairman of the Financial Services Commission: We announced the measures last Thursday.]

[President Lee Jae-myung: However, there are criticisms asking whether that will be enough.]

President Lee stated that because the Single-Stock Leveraged ETFs were introduced at the peak of a market correction, there appears to be an illusion that they are the cause of the severe problems, but he reiterated the need for supplementary measures.

[President Lee Jae-myung: Since stock market participants believe that volatility and the scale of losses have increased because of this, and that they have suffered damages, it is our duty to create supplementary measures regardless.]

Regarding real estate policy, President Lee said that unearned income from real estate is the main culprit that destroys fairness and common sense and hinders national unity, and he requested swift supply measures and a rational reorganization of the tax system.

The People Power Party claimed that the government pushed for the Single-Stock Leveraged ETF, an ultra-high-risk product, in a hasty manner over just five months, causing astronomical losses to retail investors.

[Jang Dong-hyuk/Representative of the People Power Party: These days, the public is calling our stock market a "KOSPI Casino." Now, sidecars and circuit breakers have become a daily occurrence.]

The People Power Party demanded the dismissal of Policy Chief Kim Yong-beom and an apology from President Lee.

Reported by Jung Sang-bo and Ha Ryung | Video by Jang Hyun-ki

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