Top South Korean policy makers have issued a formal apology for the introduction of single-stock leveraged exchange-traded funds, acknowledging that the products were launched without sufficient scrutiny.
The admission comes as the instruments face intense blame for exacerbating a severe sell-off in the country’s equity markets, intensifying calls for immediate regulatory action.
The finance minister’s statement marks a significant escalation in the government’s response to the market turmoil.
By conceding that the product rollout lacked careful consideration, officials are effectively validating market participants’ concerns that these leveraged instruments have amplified downside risk and destabilized trading conditions.
This acknowledgment is likely to increase pressure on regulators to implement stricter oversight or consider suspending trading in the most volatile products.
The controversy follows a series of warnings from within the financial sector.