Bank of Korea Governor Shin Hyun-song apologized for failing to issue sufficient warnings about the introduction of single-stock leveraged exchange-traded funds. He acknowledged that he had not fully grasped the volatility of the domestic stock market and the memory chip market at the time, and that he had taken an optimistic view of the policy's impact.
Shin made the remarks on the 12th during a parliamentary audit by the National Assembly's Finance and Economic Planning Committee, held at the central bank in Seoul's Jung-gu district. Asked by Rep. Jung Sung-ho of the Democratic Party of Korea whether the BOK had played an appropriate role in the process of introducing single-stock leveraged ETFs, Shin said: "We did not warn sufficiently. I am sorry to the public."
Shin said he had also touched on the issue at a press briefing following the Monetary Policy Board's rate-setting meeting in late May, but explained that at that point he had not fully assessed volatility in the domestic stock market and the memory chip sector.
He also said that the June financial stability report's projection — that single-stock leveraged ETFs would help stem the outflow of domestic investment funds abroad and attract more overseas capital — "was not appropriate given the circumstances at the time."