Korean regulators have begun proactively “deleveraging” the market. In addition to focusing on monitoring margin financing and margin trading and other margin-related transactions to prevent market pullbacks from amplifying retail investors’ losses, they also require insurance institutions to reduce the risk of asset-liability duration mismatch.

Against the backdrop of major volatility in South Korea’s stock market, heightened tensions in the Middle East, and rising expectations for further interest-rate hikes by the Federal Reserve, regulators are clearly more concerned about liquidity risk and financial institutions’ cascading reactions than just a simple market correction.