The South Korean Presidential Office recommends conducting a comprehensive review of South Korea's capital markets, including leveraged ETFs.

Kim Yong-beom, Director of the Policy Office at the South Korean President’s Office, provided a systematic response to the causes of the recent sharp plunge in the KOSPI index. He noted that the market is currently undergoing internal debate over AI investments: on one hand, concerns over the commercial sustainability of large-scale capital expenditures by major tech firms, with "semiconductor supply continuing to rise, while there is a lack of confidence that future demand can sustain this growth"; on the other, accelerating catch-up by China’s semiconductor industry has brought new competitive pressure. News such as the listing of ChangXin Memory Technologies and breakthroughs in China’s photolithography equipment manufacturing technology has led the market to re-examine whether South Korea’s competitive edge in memory chips remains solid. However, Kim clearly emphasized that AI demand is not temporary, stating "demand will remain steady and sustained." He argued that South Korea should seize this opportunity to accelerate factory construction, make timely investments, and strengthen R&D spending. Addressing the causes of amplified volatility in South Korea’s domestic market, Kim clearly stated that leveraged ETFs are not the sole driver. Factors including South Korea’s market structure where semiconductor and AI-related stocks account for 40% to 50%, high weights of derivatives and ETFs, and investor composition have combined to make volatility significantly higher than in overseas markets. While leveraged ETFs may cause temporary market impacts during end-of-day rebalancing, volatility sometimes emerges as early as the morning. This temporal distribution alone rules out leveraged ETFs as the sole driver. Kim recommended that South Korea’s Financial Services Commission conduct a comprehensive review of the overall capital market structure, including leveraged ETFs.