Koo Yoon-cheol: "Leveraged ETFs Not 100% Responsible for Market Volatility... I Apologize for Inadequate Oversight"

Finance and Economy Committee Work Report at the National Assembly on the 29th

Deputy Prime Minister and Minister of Finance and Economy Koo Yoon-cheol stated on the 29th regarding the single-stock leveraged ETFs (Exchange-Traded Funds) that have recently increased market volatility, "I am sorry that we failed to thoroughly anticipate the future repercussions when launching these products, but it is not 100% the responsibility of leveraged ETFs."

Koo Yoon-chul, Deputy Prime Minister and Minister of Strategy and Finance, is speaking at the full meeting of the Finance and Economy Committee held on the 29th at the National Assembly in Yeongdeungpo-gu, Seoul. Ministry of Strategy and Finance

At the work report session of the Finance and Economy Committee held at the National Assembly that day, Representative Bae Jun-young of the People Power Party pointed out that, as the nation's economic control tower, an expression of regret was necessary concerning investor losses due to the recent plunge in the KOSPI. In response, Deputy Prime Minister Koo said, "While introducing the system and releasing the products, I sincerely regret that we did not thoroughly assess what might happen in the future."

He continued, "As a primary measure, we raised the minimum required deposit to 30 million won and implemented a system requiring deposits to be made in cash. If necessary, we will establish additional supplementary measures."

Deputy Prime Minister Koo added, "Although we implemented these policies anticipating potential side effects, at the time of launch, the intention was to encourage investments domestically instead of funds flowing overseas, and also to reduce risk. If, in conclusion, unforeseen effects have still occurred, the government believes it is appropriate to respond with improvements as quickly as possible."

However, regarding the recent excessive fluctuations in the stock market, he explained that there are multiple complex factors at play, not just leveraged ETFs. Deputy Prime Minister Koo emphasized, "It is difficult to say that leveraged ETFs are 100% responsible for the current volatility in the stock market, as there are several interwoven causes. Even so, we will prepare corrective measures to normalize the market as soon as possible."

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