IMF “When Korea Resumes Short Selling…According to Big Costs in Prolonging Ban”
Ants and Political Rights “Premature Resumption… System improvement and supplementation should be given priority”
[서울파이낸스 박조아 김태동 기자] The concerns of the financial authorities, which professed the policy to resume short selling in March, are deepening. While politicians and individual investors preached the’prolongation of short selling ban’, the International Monetary Fund (IMF) came up with a contrary view.
Andreas Bower, head of the IMF’s Korea Mission (Deputy Director of Asia Pacific) said at a briefing on the results of the ‘2021 IMF Annual Meeting’ on the 28th. He said, “I think it is time to resume short selling.”
“To secure an even market (to protect individual investors) through the total ban on short selling is to respond with a very insignificant tool,” said Bower. Emphasized.
The IMF, which expressed concern when the financial authorities extended the ban on short selling by six months in September of last year, publicly supported the resumption of short selling this time. If the ban on short selling is prolonged, it is clear that adverse functions such as capital abandonment will become more prominent.
This is consistent with the position of the financial authorities, which planned to resume short selling as scheduled. On the 12th of the past, the Financial Services Commission dismissed the’extension’ of the port, saying, “The temporary ban on short selling due to Corona 19 in effect is scheduled to end on March 15.”
However, in addition to the fierce opposition of individual investors, the politicians repeatedly poured out remarks of “probation of resumption”, and the financial authorities deepened their distress.
As of 11:13 am on the 29th, 202,908 people have agreed to the Blue House petition for the’permanent short selling ban’ that began at the end of last year. It has increased more than 2.5 times in two weeks, demonstrating public opinion about the irrationality and uselessness of short selling.
Petitioner said, “Now that short selling is banned, is there any problem in the stock market?” “There is only one thing in the stock market to run, such as money goes into companies with investment value and companies with no investment value lose money.” “There is no problem of that.”
As the stock market continues to boom, with the KOSPI surpassing the 3200 mark and the KOSDAQ surpassing the 1000 mark this year, individual investors’ antipathy toward short selling seems to be expressing.
In the political world, one after another, they are putting their efforts into’additional extension of the ban on short selling’. Prime Minister Jeong Sye-gyun recently said, “It is not desirable to resume short selling without prior system improvement,” and “We need to improve and supplement the system that has been operated incorrectly.” It means that short selling can be resumed only after the improvement of the short selling system is preceded. In fact, it is interpreted as a statement that puts weight on the extension of the’prohibition of short selling’.
As voices of rebellion against the resumption of short selling continued, changes in the air currents of the authorities were detected. Finance Commissioner Eun Seong-su also said, “When the regular National Assembly is held in February, there is a process of listening to the opinions of the lawmakers, but please wait until the final decision is made.”
A capital market expert said, “It is very difficult to determine the direction of individual investors, politicians and market experts, and overseas institutions as the positions of individual investors, politicians and market experts, and overseas institutions are clearly divided over whether or not short selling will resume.” The concerns of the authorities will also be very deep,” he said.
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