Seoul: The head of the nation's financial regulator expressed concern on Tuesday about the potential risks posed by excessive leveraged stock investments, cautioning retail investors about taking on too much risk amid a stock market rally. Lee Chan-jin, the governor of the Financial Supervisory Service (FSS), emphasized the potential threat to household financial health during a meeting with officials focused on the protection of financial consumers.

According to Yonhap News Agency, Lee highlighted the dangers of households concentrating their financial assets excessively in specific investments or using leverage that exceeds manageable levels. He urged the financial sector to enhance its risk management efforts and to be prepared to implement preemptive measures if necessary.

The Korea Composite Stock Price Index (KOSPI) has seen significant gains this year, driven by a global surge in spending on artificial intelligence data centers. However, this growth has also been accompanied by increased market volatility. Industry data reveals that between May 27 and June 22, retail investors purchased a net total of 8.9 trillion won (approximately US$5.8 billion) in leveraged exchange-traded funds focused on single heavyweight stocks.