Kim Eun-hye: "There Was No Lehman Collapse or Dot-Com Bubble, Yet KOSPI Fell by 10% Because Market Principles Broke Down"

[Financial News] Kim Eun-hye, a lawmaker from the People Power Party, said on the 28th that KOSPI fell 10.8% and that "the vulnerability that led to the index posting its fourth-largest drop in history, even without a Lehman Brothers collapse or a dot-com bubble burst, was caused by the breakdown of market principles and procedures."
On the 29th, Kim wrote on social networking service (SNS), "Yesterday's (28th) KOSPI decline of 10.8% was even steeper than the -9.44% on Oct. 16, 2008, during the Lehman Brothers collapse that triggered the global financial crisis," and added the remarks above.
Kim said, "South Korea may be almost the only country where a specific stock index has been used as a means of maintaining power." She added, "Ahead of the local elections, the government blatantly boosted the stock index through the National Pension Service (NPS). It raised the share of domestic stocks and even delayed rebalancing, effectively handing foreign investors a window to pull national wealth out of the country."
She continued, "On top of that, the Financial Services Commission (FSC) stepped in and stirred up the idea that 'borrowing to invest is also a form of leverage.' Then, after the president said he would 'sell his house and buy ETFs,' leveraged ETF products with high volatility were introduced through the policy chief, who sounded like a fixed-nickname user on a stock discussion board." She criticized those who had once catered to investors when stock prices were rising, saying they are now silent. The term "fixed-nickname user on a stock discussion board" refers to someone who uses the same nickname consistently on a stock discussion forum.
Kim also argued, "The free-market economy that has supported the Republic of Korea is based on leaving transactions and price formation to the market, allowing individuals to make their own choices and bear responsibility for them, and improving laws and institutions so that market rules are applied fairly to everyone. Is that so difficult?" She said the government and the ruling party should take investors' concerns seriously and, instead of trying to exploit the market through power, come up with alternatives such as creating an environment that favors long-term investment.

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