Lee Admits Deficiencies in Leveraged ETF Policy... 'Strengthening Social Policy' Weighed in Policy Chief Appointment

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Delibe

On the 18th, President Lee Jae-myung addressed the controversy surrounding the introduction of single-stock leveraged exchange-traded funds (ETFs), stating, "It seems there was some incompleteness in the government's policy," and added, "I believe it is true that there were shortcomings." While he affirmed the original rationale behind the policy was valid at the time of introduction, he partially acknowledged government responsibility for not implementing sufficient investor protection measures. President Lee also revealed that, in appointing a new policy chief—a post that remains vacant—he is considering shifting the policy focus, which had been centered on economic recovery and growth, more toward strengthening social policy.

President Lee Jae-myung is responding to reporters' questions at a press conference held at the Blue House Reception Hall on the 18th. September 18, 2026. Photo by Yonhap News Agency

At the nationally broadcast press conference held at the Blue House Reception Hall on this day, when asked about the decision-making process behind introducing leveraged ETFs, President Lee answered, "I have not yet identified the details of the procedural steps regarding how the decision was reached; however, I was briefed about the introduction of leveraged ETFs at the time."

According to President Lee, the government's argument for introducing these funds was that Korean investors were sending capital overseas to purchase leveraged products based on domestic blue chips such as Samsung Electronics and SK hynix. Therefore, allowing similar products in the domestic market would stabilize the foreign exchange market and encourage domestic investment. President Lee evaluated this logic as "principally correct."

The issue, he explained, was with the timing of the introduction and the absence of investor protection mechanisms. President Lee stated that leveraged ETFs were introduced almost at the peak of a stock market rally, but as the market shifted downward, investor losses multiplied. He emphasized that, while no one can predict the direction of stock prices, "it is fair to criticize that things might have been better had all necessary safeguards been in place from the start," acknowledging flaws in the policy design process. He meant the government failed to meticulously design safeguards from the outset, considering the unique risks associated with leveraged products.

President Lee Jae-myung is answering questions from the press at a press conference held at the Blue House's Yeongbingwan on September 18, 2026. Photo by Yonhap News.

Regarding the appointment of the next policy chief—a matter attracting significant attention—President Lee said, "I am still deliberating." He indicated that the delay in naming a successor after the resignation of former policy chief Kim Yongbeom is partly due to re-evaluating the direction of government policy.

President Lee remarked, "Up until now, we have focused on economic recovery, sustainable growth, and securing engines for further expansion. Virtually all of the state's capacity has been concentrated on these aims." He continued, "As the situation has improved significantly, there are growing calls to shift policy focus slightly toward strengthening social policy, where there is still a perceived lack." He concluded, "I am considering this as well and am currently searching for a suitable candidate."

This content was produced with the assistance of AI translation services.