President Lee Jae-myung stated on November 13 that there seems to be an overwhelming number of reforms needed specifically for exchanges and capital markets, suggesting the establishment of a dedicated high-level task force to address these issues.
During a policy meeting on capital markets held at the Korea Exchange in Yeouido, Seoul, President Lee emphasized the necessity of a task force focused on capital market reforms.
He acknowledged, "I think I made a mistake last year. I should have established a dedicated reform body and pushed it forward vigorously, but I may have been complacent, thinking things were going too smoothly." He added that it is essential to conduct surveys and gather opinions to identify tasks that need to be legislated and implemented.
President Lee proposed creating a high-level body that would go beyond regular administrative duties, inviting participation from both ruling and opposition parties in the National Assembly, as well as private exchanges, investment institutions, and associations to engage in rigorous discussions to produce optimal solutions.
He further stated, "For issues with significant conflicting opinions, let’s clarify the points of contention and report directly so we can discuss and resolve them together."
During the meeting, market participants also urged the activation of the market stabilization fund to mitigate stock market volatility.
Kim Jin-wook, chief economist at Citibank, remarked, "The most practical policy to reduce volatility is to activate the stabilization fund. Just signaling its activation would limit short-selling forces, automatically reducing market volatility and allowing foreign investors to enter and buy long-term."
Park Se-ik, CEO of Chesley Investment Advisory, pointed out the issue of excessive market volatility and suggested that the top five domestic financial institutions should quickly establish a meaningful stabilization fund.
In response, government and financial authorities indicated that the established stabilization fund could be extended and activated through a capital call mechanism, but they maintained a cautious stance, stating, "The stabilization fund is a very urgent or temporary and exceptional measure."
President Lee questioned whether this would be seen as market intervention, potentially increasing distrust in the market, but acknowledged, "The direction is correct. Since that is the reason for having the stabilization fund, we need to check whether there are effective ways for it to operate, what the appropriate scale would be, and if there are new methods available."
* This article has been translated by AI.
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