Yoon calls for ban on short selling until changes are made

President Yoon Suk Yeol speaks in a Cabinet meeting at the Yongsan presidential office in central Seoul Tuesday. [JOINT PRESS CORPS]

President Yoon Suk Yeol called for a ban on short selling until "fundamental improvements" are made in a Cabinet meeting Tuesday.

"Ignoring the issue of illegal short selling further will not only cause great losses to retail investors by making it difficult to set fair prices but will also lead to a decline in trust in the securities market and investor withdrawal," Yoon said at the Cabinet meeting held at the Yongsan presidential office.

"To prevent further damages, we will ban short selling until fundamental improvement measures are made."

Last week, Korea banned stock short selling through the end of June 2024 amid efforts to crack down on illegal short selling by global investment banks. It came after the Financial Services Commission (FSC) cited concerns about growing market volatility and illegal short-selling practices undermining market stability.

Citing concerns that the move could lead to another failure to win a developed market status from Morgan Stanley Capital International (MSCI), Yoon said, "Unlike the United States, Korea's stock market is highly volatile and has a high proportion of individual investors."

He added he believes this will have a "positive impact on the competitiveness of our securities market in the long run."

Yoon urged the FSC and the Financial Supervisory Service to "prepare a proper solution to correct the tilted playing field in the securities market and protect individual investors."

Yoon addressed his other recent policies to promote public livelihood, such as establishing a cheaper 5G data plan and freezing electricity rates for households and small businesses.

Yoon said he plans to depart for San Francisco on Wednesday to attend the APEC summit and make a state visit to Britain next week.

"This APEC summit is held amidst a global complex crisis where geopolitical instability and geoeconomic changes intersect," Yoon said. "At this meeting, where the leaders of member countries accounting for more than 60 percent of the world's GDP will gather, we will discuss ways to cooperate that can substantially benefit our economy, such as diversifying supply chains and expanding trade and investment."

He said the state visit to Britain will "serve as an opportunity to take economic cooperation between the two countries to the next level, focusing on the expansion of Korean companies into Britain, high-tech industrial supply chains and science and technology cooperation."

Following his London trip, Yoon will head to France to promote Busan's World Expo 2030 bid ahead of the vote by the Bureau International des Expositions (BIE) to elect the host city.

"I will meet BIE representatives from each country in person in Paris, where the final vote for the 2030 Expo will be held, and make last-minute efforts to host the Expo in Busan," Yoon said.

BY SARAH KIM [kim.sarah@joongang.co.kr]