Kim Min-seok Apologizes Over Single-Stock Leveraged ETF Launch as Rival Demands Accountability

Jung Cheong-rae casts Kim as responsible for single-stock ETF introduction

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

Democratic Party leadership candidates traded blame over responsibility for the introduction of single-stock leveraged exchange-traded funds, with Kim Min-seok, who was prime minister at the time, apologizing to the public.

At a televised debate for party chair candidates held at SBS in Mok-dong, Seoul, on Aug. 12, Kim said he presided over the Cabinet meeting that approved the leveraged ETF measure because the president was on an overseas trip that day. "I apologize to the public who had concerns," he said.

He said the matter fell under the economic team's authority, so there was no separate in-person briefing beforehand. Problems later emerged, he said, though the market appears to have regained some stability through measures including higher margin deposit requirements. He added that his side would continue to monitor the issue more closely.

Kim also said that halting trading immediately at the time, as some had suggested, would have created even greater confusion. He pledged to pay closer attention to each issue as South Korea's stock market moves toward normalization.

He added that it was inappropriate for the opposition and, in particular, some within the ruling camp to turn the matter into excessive political attacks. The issue should be handled thoroughly as a policy matter, Kim said.

Jung Cheong-rae, however, put the spotlight on Kim's responsibility. He said many retail investors had been hurt by single-stock leveraged ETFs. "Let's fact-check this," Jung said. "If you look at the Cabinet bill dated April 21, Kim Min-seok is listed as the submitting prime minister, and he also chaired the Cabinet meeting."

Jung also cited remarks by the head of the Financial Supervisory Service, who said he should have stopped the product "even if it meant lying down in front of it." Jung criticized the term single-stock ETF itself, calling it as contradictory as "hot ice cream."

"I think much more caution was needed," he added. "Trust is the foundation of the stock market. This is President Lee Jae-myung's responsibility, but if there is anything that warrants accountability, I believe strong action is necessary."

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