Oh Se-hoon, the Seoul mayor, on the 17th urged a full audit of the approval process for risky derivatives, saying a more fundamental prescription is needed to restore the soundness of the capital market.
Oh said on his social media (SNS), "A country that robs young people of opportunities to build sound asset holdings has no future," and stated accordingly.
He said, "This year, KOSPI sidecars were triggered 37 times. We have already surpassed the full-year record of 26 in 2008, during the global financial crisis. Circuit breakers were also triggered seven times, reaching half of the all-time total," and argued, "With no 9/11 terror attack or COVID-19, the capital market is degenerating into a gambling den."
He added that this was the result of approving single-stock leveraged derivatives despite knowing their risks and standing by until individual investors' asset holdings were blown to pieces, calling it a "clear man-made disaster."
He continued, "In a society where the ladder to buy a home by saving wages has been cut, the capital market was the last bastion where young people could dream of moving up the ladder, but it is now functioning as a cruel trap," and said, "Only after the situation reached this point did the government roll out a belated measure to raise the minimum deposit for single-stock leveraged exchange-traded funds (ETF) to 30 million won and announce it would take effect in Nov."
He criticized it as fixing in a panic the latch that should have been shut long ago only after young people were pushed to the brink of bankruptcy.
Oh also criticized Lee Jae-myung's government over its policy to forgive long-term arrears debt, saying it shot back by calling concerns about moral hazard "irresponsible agitation," and adding, "On one side, it drives young people into a gambling den, and on the other, it grandstands with debt forgiveness."
He argued, "The tragedy of the capital market is ultimately becoming a domino bomb that is spreading to the real estate market," and said, "The reality of the KOSPI rise that the government and ruling party so proudly touted and promoted has ultimately fueled blind overheating of the market, and the liquidity funds drifting away from it are once again fiercely stoking the real estate markets in Seoul and the greater metropolitan area."
Oh said, "The price to pay for the collapse of the gambling den is ultimately leading to a surge in home prices, foreshadowing a cruel outcome that will shatter even the housing stability of young people," and added, "The Seoul city government will help restore the broken asset ladder for young people on the edge of a cliff, contribute to building a fair society, and stand by our young people until the end."