Opposition parties bombard “the country has become a casino”! Kospi plummeted 40%, South Korea's finance minister held an emergency meeting tonight to bail out the market

The Zhitong Finance App learned that South Korea will hold an emergency meeting on Wednesday evening to discuss the market situation after the stock market plummeted and erased investors' assets worth tens of billions of dollars.

According to Congressman Yoo Dong-soo (Yoo Dong-soo), the meeting will be presided over by South Korea's Minister of Finance Ko Yun-cheol. Officials from all South Korea's top financial authorities will attend. The meeting will begin at 6 p.m. local time.

On Wednesday, senior government officials faced multiple rounds of questions from lawmakers in the South Korean National Assembly. Lawmakers believe that part of the sharp decline in the stock market was due to the single-share leveraged product introduced by South Korea in May.

At the hearing, Ku Yun-cheol apologized and acknowledged that the regulatory authorities should have carried out a more careful review of these products before they were launched. But he still insists that leveraged exchange-traded funds (ETFs) are just one of a few drivers of recent market turmoil.

“We have introduced a package of countermeasures, but if necessary, we will take additional steps to help the market return to normal,” Koo Yun-chul told lawmakers on Wednesday.

The Korea Composite Stock Price Index (Kospi) has fallen by about 40% from its June high. After SK Hynix announced lower-than-expected earnings, the sell-off wave on Wednesday further intensified, triggering market questions about the boom in artificial intelligence investment and accelerating retail sell-offs. The sharp drop in stock prices caused the entire market to trigger a fuse mechanism for the second day in a row.

Lawmakers argued that single-stock leveraged ETFs amplified a series of fluctuations, making the Korean stock market significantly more volatile than its global peers because speculative trading concentrated on a few blue-chip stocks.

Wednesday's hearing further evolved into an attack on how the government's policy was handled. Opposition lawmakers questioned why, despite widespread concerns in the asset management industry, these products were still being launched at an unusually rapid pace, and accused officials of putting rising stock prices above market stability.

Lee Jongwook (Lee Jongwook), a member of the National Power Party, told Ku Yun-chul at the hearing: “This country has become a casino; these are simply products that should never be approved for sale. I think this is a policy failure.”

When opposition lawmakers asked if he would resign if the consequences of the policy worsened, Koo Yun-cheol said that speculating about resigning was irresponsible, adding that his focus was on stabilizing the market.

Amid outside criticism, regulators are preparing to impose further restrictions on leveraged ETF trading. The Korea Financial Services Commission (FSC) said this week that it will consider setting investment limits for individual investors, mandatory investor education, and additional trading restrictions if the stricter requirements, which will come into effect on July 31, fail to curb demand.

On Wednesday, South Korea's top financial regulators also apologized for the growing controversy surrounding single-share leveraged ETFs.