Story perspectives

Finance Minister apologizes as leveraged ETF losses hit $38.7 B

7/29/2026

Summary

Story summary

Finance Minister Koo Yun-cheol apologized to lawmakers for losses after the May 27 launch of leveraged ETFs.
Households invested $12 billion (?15 trillion won) in leveraged semiconductor ETFs in the first half of 2026.
The KODEX SK Hynix Leveraged ETF fell more than 80 % from its June 23 peak, leading Citigroup strategist Mohammed Apabhai to estimate losses at $38.7 billion (?56.3 trillion won).
The Financial Services Commission will consider raising investment thresholds or capping leveraged products.

History

Historical Context

Lehman Brothers’ September 15 2008 bankruptcy sparked the global financial crisis, prompting U.S. regulators to adopt stricter capital standards such as the Dodd-Frank Act (2010) and Basel III. The episode showed how lax net-capital rules had inflated leverage. Today South Korea’s Financial Services Commission, led by Finance Minister Koo Yun-cheol, confronts $38.7 billion semiconductor-ETF losses in H1 2026, reviving calls for tighter product thresholds.

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Story summary

Finance Minister Koo Yun-cheol apologized to lawmakers for losses after the May 27 launch of leveraged ETFs.
Households invested $12 billion (?15 trillion won) in leveraged semiconductor ETFs in the first half of 2026.
The KODEX SK Hynix Leveraged ETF fell more than 80 % from its June 23 peak, leading Citigroup strategist Mohammed Apabhai to estimate losses at $38.7 billion (?56.3 trillion won).
The Financial Services Commission will consider raising investment thresholds or capping leveraged products.

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