Former Rebuilding Korea Party leader Cho Kuk criticized the government's introduction of single-stock leveraged exchange-traded funds (ETF) as a "clear policy failure." Cho placed responsibility on the presidential office's policy office led by Kim Yong-beom, the Office for Government Policy Coordination, the Financial Services Commission, and the Financial Supervisory Service.
On the morning of the 5th, former leader Cho wrote on his Facebook page, "Since the ruling Democratic Party is staying silent, I will speak from a 'red team (an in-house expert group that examines vulnerabilities)' perspective," citing a Bloomberg News report on the 2nd titled "Angered by the KOSPI plunge, Koreans are sharply criticizing President Lee Jae-myung and vowing to leave the stock market," and said this.
Cho said, "Policy Director Kim held an unofficial meeting and pushed ahead with a legislative notice on Jan. 30," adding, "Despite experts' criticisms, the presidential policy chief pushed for the introduction and built momentum, and right before the June 3 election, 16 single-stock leverage ETFs came to market." He went on, "After the local elections, Financial Supervisory Service Governor Lee Chan-jin said, 'We should have blocked it by lying down,' and the policy decision process is a mystery."
He also pointed out that at the Cabinet meeting on Apr. in , there was not enough discussion of the policy's side effects, and that the Financial Services Commission did not even conduct a "stress test (risk assessment)" before launching single-stock leverage ETFs. He criticized, "I cannot shake the suspicion that the government sloppily and hastily prodded a 'money move' from real estate to the stock market."
He then specifically mentioned the market plunge. Cho said, "After hitting an intraday high of 9,385.59 points on June 19, the KOSPI index plunged and fell to the 6,000 level within a month," adding, "ETF net assets also dropped from 533 trillion won to the 398 trillion won range just eight days later, meaning a massive 135 trillion won in assets evaporated, and wails were heard across the market."
Cho said, "We cannot just gloss over this clear failure of state-controlled finance," adding, "Policy officials, including Presidential Policy Director Kim Yong-beom, Minister of the Office for Government Policy Coordination Yun Chang-ryeol, Financial Services Commission Chairman Lee Eog-weon, and Financial Supervisory Service Governor Lee Chan-jin, should each be held accountable."