Deputy Prime Minister and Minister of Finance and Economy Koo Yun-cheol stated that he is "discussing complementary measures" regarding the recent identification of single-stock leveraged ETFs as a primary cause of stock price volatility.
During the plenary session of the National Assembly's Strategy and Finance Committee held today (July 7), Deputy Prime Minister Koo said, "I am well aware of the concerns that leveraged ETFs are currently causing significant volatility in the stock market."
He explained, "When we introduced the policy, we considered the impact on both the foreign exchange and capital markets, but some issues are currently being raised," adding, "We are in the process of discussing how to supplement and minimize those problems."
In response to a question asking if the Ministry of Finance and Economy pushed for the introduction of leveraged ETF products to manage exchange rates, he replied, "That is not necessarily the case," and added, "We introduced them based on the judgment that such products were necessary after comprehensively considering various markets."
He continued, "Before this system was introduced, 2x and 3x leveraged ETFs were already operating overseas, and a significant amount of investment was flowing there," explaining that "there was also an aspect of introducing them to prevent that."
He further added, "We have implemented mandatory training and established certain guidelines (for leveraged ETF investments), but as various concerns are being raised at this point, we are discussing ways to stabilize the situation."  
(Photo: Yonhap News)