"Delisting single-stock leveraged exchange-traded funds (ETFs) is hard to imagine. If it were to happen, it would deliver a tremendous shock to the market," said Kim Yong-beom, the chief policy officer at the Blue House, during an appearance on KBS's 'Sunday Diagnosis Live' on July 19.
He noted that investors are already engaged and that the product has a scale exceeding 10 trillion won. Regarding recent measures by authorities to increase the cash deposit requirement for trading leveraged ETFs to 30 million won and allow transactions in increments of 20 shares, he expressed optimism, stating, "This should alleviate many of the side effects."
Kim explained that the authorities had engaged in extensive discussions and had taken significant steps to address issues raised in the market. He predicted that many of the identified problems would be resolved once these measures are implemented.
However, he cautioned that leveraged ETFs can have a magnified impact during downturns, suggesting that further discussions among authorities, asset management firms, and securities companies are necessary to minimize market shocks.
He highlighted the tendency for increased volatility in leveraged ETF products just before market close, stating, "We need to consider various methods to minimize the impact of these products on the market at specific times."
Kim also mentioned the importance of minimizing the discrepancy between the net asset value (NAV) of ETFs and their actual market prices, suggesting that there should be discussions on how to alleviate the selling pressure needed to align these values.
On the topic of the rising prices in real estate transactions, rentals, and lease markets, referred to as a 'triple surge,' he expressed regret, saying, "I sincerely apologize to many citizens. The supply and various conditions in the real estate market are quite challenging, and I take this matter seriously."
He clarified his previous statement about needing to "build houses immediately," explaining that supply cannot be rapidly increased and that various methods, such as non-apartment rental purchases, must be mobilized urgently to find solutions.
Kim emphasized the need to utilize all available supply, including providing non-apartment and private officetels, and converting commercial land allocated in the third new town areas into residential use for short-term effectiveness.
He added that activating rental purchases is the most effective short-term measure and that efforts should focus on allowing the conversion of commercial buildings in Seoul into officetels for immediate benefits.
However, he noted that redevelopment and reconstruction are not a panacea, stating, "They do not secure supply in the short term. While we can discuss expediting procedures and appropriate discussions on floor area ratios, redevelopment and reconstruction take at least three to five years."
Regarding housing supply using semi-industrial areas in Seoul, he mentioned that this is not solely a city issue and that collaboration with the central government could yield greater results. He has scheduled a meeting with Seoul Mayor Oh Se-hoon.
On the principles of real estate tax reform, he stated, "We will differentiate between multiple homeowners and single homeowners, applying different standards for actual residents and non-residents."
He added that there have been many discussions about treating even a single high-value property differently due to its burden on the housing market, indicating that some judgment has been made on this issue, but the specifics of the standards remain to be determined.
In response to claims that increasing property taxes would necessitate lowering capital gains taxes to encourage sales, he acknowledged that this is a consideration but noted that it could be structured to allow for sales at appropriate times while increasing burdens if the time is exceeded.
He emphasized that this is a matter of designing tax equity and that while lowering capital gains taxes in response to higher property taxes is a consideration, it cannot be applied uniformly.
Meanwhile, Kim addressed concerns about delays in U.S. investment projects, stating, "That is not the case. We are progressing according to a proper schedule," and added that preparations are underway for the first U.S. investment to materialize.
When asked about the timeline for visible U.S. investments, he replied, "It should happen in August or September."
* This article has been translated by AI.
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