Kim Apologizes Over Single-Stock ETF Rollout as Democratic Party Rivals Trade Blame

Jung Sharpens Focus on Kim’s Responsibility for Single-Stock ETF Launch

“Kim also chaired the Cabinet meeting ... if anyone should be held accountable, that should happen”

Candidates for the leadership of the Democratic Party clashed over responsibility for the introduction of single-stock leveraged exchange-traded funds. Kim Min-seok, who was prime minister when the products were approved, bowed his head and apologized to the public.

At a televised debate among Democratic Party leadership candidates held at SBS in Mok-dong, Seoul, on Aug. 12, Kim said he chaired the meeting that approved the leveraged ETFs because the president was on an overseas trip that day. “I apologize to the public, especially those who were concerned,” he said.

Kim said the matter was under the economic team’s authority and that there had been no separate face-to-face briefing in advance. Problems emerged afterward, he said. He added that the market appears to have regained some stability after steps including higher margin deposit requirements, and pledged to keep watching the issue more closely.

He also argued that halting trading immediately at the time, as some had proposed, would have created even greater confusion. As South Korea’s stock market normalizes, he said, the government should handle such issues more carefully one by one.

Kim also said it was inappropriate for the opposition and, in particular, some within the ruling camp to turn the issue into an excessive political attack. He said it should be dealt with thoroughly as a policy matter.

Jung Chung-rae, however, emphasized Kim’s responsibility. He said many retail investors had been badly hurt by single-stock leveraged ETFs. “Let’s fact-check this,” Jung said. “If you look at the Cabinet bill dated April 21, the submitter is listed as Prime Minister Kim Min-seok, and Kim also chaired the Cabinet meeting.”

Jung also cited remarks by the head of the Financial Supervisory Service, who said he should have blocked the move “even if it meant lying down in front of it.” Jung criticized the very term single-stock ETF, calling it a contradiction in terms, “like hot ice cream.”

“Much more caution was needed,” Jung said. “Trust is the foundation of the stock market. It is up to President Lee Jae-myung, but if there is anyone who should be held accountable, I believe strong action is needed.”

Kim Hee-seon, Hankyung.com reporter gimme_sun@hankyung.com