Cho Kuk blasts Kim Yong-beom over single-stock leveraged ETF debacle: 'Government-directed finance has failed'

Cho Kuk, head of the Rebuilding Korea Party's innovation policy research institute, sharply criticized single-stock leveraged ETFs — widely blamed for recent wild swings in the stock market — calling them "a failure of government-directed finance engineered by key policy figures led by Cheong Wa Dae Policy Chief Kim Yong-beom."

Writing on his Facebook page Wednesday, Cho said the failure "cannot be quietly swept under the rug" and urged that Kim, Office for Government Policy Coordination Director Yun Chang-ryeol, FSC Chairman Lee Eok-won and FSS Governor Lee Chan-jin each be held accountable.

Cho argued that the entire process must be fully disclosed and those responsible held to account — from what he called a "mysterious" and inexplicable introduction of the products, to a delayed response that worsened investor losses, to ineffective patchwork fixes. "Drawing on my past experience as civil affairs secretary, I believe the presidential office's civil affairs secretariat needs to investigate those involved in this affair," he said.

Cho added that accountability was "also necessary for the success of the Lee Jae Myung administration" and "a way to answer the fury of citizens who are in tears over forced liquidations."

He also noted that experts had warned the launch was premature, but that Kim had pushed for it and built momentum, with 16 single-stock leveraged ETFs hitting the market just before the June 3 local elections. Cho pointed to remarks by FSS Governor Lee after the election — that he "should have thrown himself on the ground to block it" — as further evidence that the policy decision-making process was, in his words, a mystery.

Cho questioned why the government had "so carelessly and hastily rushed a 'money move' from real estate into the stock market," saying young people had "fallen into a leverage trap laid by the government and are now saddled with trauma and debt they cannot shake for the rest of their lives." He urged the government to become "not a government that encourages youth to invest in stocks, but a government that invests in youth."