Koo Yun-cheol, Deputy Prime Minister and Minister of Strategy and Finance, said the recent rise in stock market volatility was because "polarization has deepened, with the share of two particular stocks (Samsung Electronics and SK hynix) reaching as high as 50%," adding, "The government is also concerned about the increased volatility and is keeping a close watch."
Deputy Prime Minister Koo said this on the 29th in response to a question from Lee Jun-seok of the Reform Party during a National Assembly Strategy and Finance Committee briefing, asking for the government's assessment of the recent KOSPI decline.
Lee said, "When the market rises, the government and the ruling party promote it as a policy achievement, and when it falls, they blame market conditions." In response, Deputy Prime Minister Koo said, "The government does not get elated or dejected over the stock market," and added, "The government is internally considering ways for the stock market itself to reduce volatility and move stably."
On single-stock leveraged products, he signaled the possibility of further measures. Kim Tae-nyeon of the Democratic Party of Korea said, "Single-stock leveraged exchange-traded funds (ETF) and the like have recently amplified stock market volatility," and called for a review of the following: ▲ a cap on total product issuance by each asset manager ▲ same-day trading limits or bans ▲ an order aggregation and execution method at fixed intervals such as every 30 minutes ▲ unified standards for initial margin ratios ▲ a U.S.-style "risk-based margin system."
Deputy Prime Minister Koo said, "We will review it," adding, "Since we have decided to implement supplementary measures for single-stock leveraged ETFs (starting on the 31st), we will add further measures if necessary and operate them to reduce market volatility."