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2026-09-10 11:24:06
[The Bank of Korea calls for monitoring of overseas derivatives linked to chipmakers, warning of rising cross-market volatility risks] (1) The Bank of Korea has called for increased monitoring of overseas derivatives linked to South Korean chipmakers, warning that their rapid growth could amplify domestic market volatility. In its semi-annual monetary policy report to the National Assembly, the central bank pointed out that the concentration of market interest in semiconductor stocks, the rebalancing of foreign investors' portfolios, and the accumulation and de-leveraging of domestic leverage were the driving factors behind the unprecedented volatility in the KOSPI index from January to July. (2) The Bank of Korea stated that global banks and ETF managers traded South Korean spot stocks, futures, and options when hedging total return swaps, significantly amplifying domestic stock price volatility. The central bank also mentioned that leveraged bets by situational awareness hedge funds are a recent example.
