Funeral wreaths calling for the delisting of leveraged ETFs are displayed near the main gate of the National Assembly in Yeouido, Seoul, on July 29. [Yonhap]
Funeral wreaths calling for the delisting of leveraged ETFs are displayed near the main gate of the National Assembly in Yeouido, Seoul, on July 29. [Yonhap]

The People Power Party on Sunday criticized the government's move to impose additional regulations on single-stock leveraged exchange-traded funds amid extreme volatility in domestic markets, saying the response had exposed the true face of an "amateur government."

The party also urged a full investigation into how the leveraged ETF products were introduced, arguing that the officials responsible for the crisis should not be the ones tasked with cleaning it up.

Choi Eun-seok, the PPP's floor spokesperson, said in a statement Sunday titled "Reckless when pushing through, frantic when cleaning up — the true face of an amateur government" that the government had "belatedly pulled out additional regulatory cards for single-stock leveraged ETFs." He said the measures would cap individual investment limits, impose levies on excessive trading and create a legal basis for market-stabilization steps in emergencies.

"After recklessly pushing through a dangerously risky product, plundering the public's assets and turning the Korean stock market into a gambling den, the government is now stumbling through its damage-control response — nakedly exposing the true face of an amateur government," Choi said.

He said the Lee Jae Myung administration had "hastily pushed through single-stock leveraged products that run directly counter to the basic principles of ETFs, under the leadership of Policy Chief Kim Yong-beom," calling it "reckless policy overreach that goes beyond mere incompetence."

"The current situation will not be resolved by rolling out a few stopgap measures," Choi said. "Abandon any thought of covering up responsibility with temporary fixes to escape public anger."

Choi urged that the full circumstances surrounding the introduction of the single-stock leveraged products be made public without a shadow of doubt — including who first pushed the idea, who raised warning signs, who ignored those warnings and who turned a blind eye despite knowing the risks.

"Kim must immediately resign and take responsibility for the reckless policy that turned Korea's capital markets into a speculative arena," Choi said. "The public cannot accept the idea that the person who caused the problem should also be the one to fix it."

He said that with the government having failed in real estate, failed in the stock market and now shaking the livelihoods of ordinary citizens, having the same person present remedies "will only breed distrust, not accountability." "Unless the control tower changes, any measure will only be another source of anxiety for the public," he added.


shindw@heraldcorp.com