South Korea Admits Leveraged ETF Flaws While Housing Market Stabilizes
President Lee Jae-myung acknowledged policy shortcomings in leveraged ETFs and projected a gradual stabilization of Seoul housing prices.
South Korean President Lee Jae-myung admitted that the introduction of single-stock leveraged ETFs contained policy shortcomings. This acknowledgment follows significant criticism regarding the instruments' role in domestic stock market volatility.
The president stated that while the issue is currently manageable due to supplementary measures, the initial decision process was flawed. He emphasized that specific individuals must have made the decision, though he did not name them publicly.
Leveraged ETF Policy Deficiencies
Opposition parties argue that former chief of staff Kim Yong-beom pushed for the ETF introduction. President Lee said he has not reviewed the detailed procedural contents of the decision. He declined to assign direct blame to specific officials during the press conference.
The government maintains that current supplementary measures have mitigated the immediate risks. The debate continues over whether the products were suitable for the domestic market structure. Market participants await further regulatory clarity on these instruments.
Seoul Housing Price Stabilization
President Lee projected that Seoul real estate prices will gradually stabilize. He identified concentration in the capital region as the fundamental cause of recent market stress. The administration is committed to balanced regional development and expanding housing supply.
The president described a flattening process in the market. Prices in the Gangnam area are falling while peripheral areas are rising. This shift indicates a redistribution of demand across different zones in the capital.
Jeonse System and Market Outlook
The president clarified his stance on the jeonse deposit system. He stated that the system will gradually disappear rather than being abolished immediately. This comment corrected earlier interpretations of his remarks on housing policy.
According to GN auto markets/housing: housing prices, the administration expects stability through regulations, supply, and taxation. Analysts assess that the press conference reaffirmed the existing policy stance. No new major interventions were announced during the event.
