Is Leveraged ETF the Culprit Behind Stock Volatility? "Delisting Is Difficult," Says Presidential Policy Chief

As calls grow to abolish single-stock leveraged exchange-traded funds (ETFs), which have been blamed for recent extreme stock market volatility, Kim Yong-beom, the presidential policy chief, drew a line by stating, "It is difficult to consider delisting."

Appearing on KBS's "Sunday Diagnosis Live" today (July 19), Kim addressed the issue of single-stock leveraged products, saying, "There is controversy over the timing of the product's introduction, and it is true that the nature of these stocks can amplify volatility."

In response to criticism that this represents a "policy failure," Kim acknowledged that stock market volatility has indeed increased, but countered that the policy was implemented for the national interest.

[Voice] Kim Yong-beom / Presidential Policy Chief: "In any case, at the time, the intention was to foster our capital market and to optimize the flow of funds leaking overseas; there were national interests involved."

The government recently introduced supplementary measures, such as raising the minimum deposit requirement for trading leveraged products from 10 million won to 30 million won in cash, and increasing the minimum trading unit from 1 share to 20 shares.

Kim expressed his outlook that these measures would resolve a significant portion of the problems that have been pointed out.

[Voice] Kim Yong-beom / Presidential Policy Chief: "These measures were taken by accepting a significant portion of the issues raised in the market. Therefore, once implemented, I believe many of the problems that have been pointed out will be largely resolved."

Kim also took a negative stance on the "delisting" arguments raised by some, noting that it would cause a massive shock to the market.

[Voice] Kim Yong-beom / Presidential Policy Chief: "It is difficult to consider delisting. It is a product that has been introduced, investors are already invested in it, and the product has formed over 10 trillion won in assets."

Kim added that while these products have a side effect of doubling the impact during market downturns, "Authorities, asset management firms, and securities companies will need to discuss further how to minimize market shocks."

Reported by Kim Taewon | Video by Na Hong-hee | Design by Lee Jung-ju | Produced by SBS Digital News | Source: KBS Sunday Diagnosis
※ Please note: This article was translated by AI and may contain errors.