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

[Anchor]

President Lee Jae-myung pointed out that there is criticism that single-stock leveraged ETF products, which have been identified as a cause of rapid stock price fluctuations, have increased instability in the market more than necessary. However, he emphasized that it is the government's duty to create practical supplementary measures, noting that there is an aspect of illusion where the problem appears more severe because they were introduced during a stock market correction phase.

Reporter Park Yerim reports.

[Reporter]

President Lee Jae-myung, who presided over a cabinet meeting today (July 21), brought up the complaints of investors regarding single-stock leveraged ETF products based on underlying 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 instability in the stock market" and that it has had the "effect of reducing foreign exchange outflows."

[President Lee Jae-myung: In an upward phase, it actually deepens and intensifies the rise, and in a downward phase, it deepens the decline.]

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

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

[President Lee Jae-myung: But there are criticisms asking if that will even be enough.]

President Lee noted that because single-stock leveraged ETFs were introduced at the peak of a market correction, there appears to be an illusion that the problems are serious because of them, but he reiterated the need for supplementary measures.

[President Lee Jae-myung: Stock market participants think that volatility has increased and the scale of the drop has widened because of this, and that they have suffered losses, so it is our duty to create supplementary measures regardless.]

Regarding real estate policy, President Lee stated 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 rational reorganization of the tax system.

The People Power Party claimed that the government pushed for single-stock leveraged ETFs, which are ultra-high-risk products, in a hasty manner over 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 daily occurrences.]

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

(Video reporting: Jung Sang-bo, Ha Ryung | Video editing: Jang Hyun-ki)
※ Please note: This article was translated by AI and may contain errors.