[Edaily Reporter Jang Young-eun ] In October, when the KOSPI fell more than 16% in a single month, credit loans increased again. This is interpreted as retail investors borrowing money to buy stocks at low prices amid the sharp market decline. However, as the stock market’s sharp decline has continued into November, concerns are growing over potential losses for retail investors who borrowed money to invest.

According to the “October 2026 Financial Market Trends” report released by the Bank of Korea on the 11th, banks’ “other loans” increased by 1.7 trillion won in October compared to the previous month. “Other loans”—which include personal loans, overdraft accounts, and stock-backed loans—shifted from a decrease of 2.3 trillion won in September to an increase. This marks the first increase in three months since July (2 trillion won). The cumulative increase from January through October this year reached 6.6 trillion won, 11 times the amount recorded during the same period last year (600 billion won).

This trend holds true even when expanding the scope to the entire financial sector. According to the “October 2026 Household Loan Trends” report released today by the Financial Services Commission and the Financial Supervisory Service, credit loans across the entire financial sector increased by 1.2 trillion won in October. After declining by 2.9 trillion won in September, the figure returned to growth in just one month. Other loans, including credit loans, also shifted from a 5.4 trillion won decrease the previous month to a 2.4 trillion won increase. Financial authorities assessed that “volatility in credit loans has increased.”

The Bank of Korea cited net stock purchases by individuals as a cause, along with a base effect resulting from the disappearance of seasonal factors such as the sale and write-off of non-performing loans at the end of the September quarter and the inflow of Chuseok bonuses. Lee Seung-yeop, Deputy Director of the BOK’s Financial Markets Bureau, said, “While it is difficult to quantify the contribution of each factor, retail investors’ stock investments—which were net sales in September based on the KOSPI—turned to net purchases in October,” adding, “We believe this has influenced credit loans.” This implies that as stock prices fell, retail investors took out loans to buy stocks.

A trend of borrowing also emerged in the secondary financial sector. Household loans from specialized credit financial institutions, such as credit card companies, shifted from a decrease of 900 billion won in September to an increase of 800 billion won in October. Fund flows followed a similar pattern. In October, inflows into equity funds fell by 26.5 trillion won due to the decline in stock prices. However, the Bank of Korea explained that, excluding unrealized gains and losses, 8.3 trillion won in new funds actually flowed in.

The problem is that the stock market experienced significant volatility in October. The KOSPI fell for seven consecutive trading days, dropping from 7,003.74 on October 2 to 5,554.22 on October 15. This was driven by a combination of concerns over the profitability of artificial intelligence (AI) investments and rising U.S. inflation. During this period, foreign investors were net sellers for eight consecutive trading days, offloading 17.8345 trillion won worth of stocks. The KOSPI ended October at 5,730.74, marking a 16% drop over the month. Major semiconductor stocks, such as Samsung Electronics and SK Hynix, led the decline.

The decline accelerated in November. On the 3rd (local time), the Democrats secured control of both the U.S. Senate and House of Representatives in the midterm elections, and candidates who advocated for suspending or postponing data center operations were elected even in states with a high concentration of data centers. As concerns over data center regulations intensified, the KOSPI plunged 6.02% in a single day on the 6th, closing at 5,059.69. Early in the session, the first-stage circuit breaker was triggered, halting trading for 20 minutes. The KOSPI closed at 5,239.13 on the 10th, marking an additional 8.6% decline from the end of October.

For investors who borrowed money, the burden of forced liquidation increased. A forced liquidation occurs when stock prices fall and the value of collateral becomes insufficient, prompting securities firms to forcibly sell the shares. The Joint Market Situation Review Meeting (F4) of relevant government agencies decided on the 6th to exempt securities firms from the requirement to maintain a 140% margin maintenance ratio for margin loans for three months starting on the 9th. This is intended to prevent a vicious cycle in which falling stock prices trigger forced liquidations, which in turn drive stock prices even lower.

The prevailing view in the securities industry is that the market is experiencing an “undershooting” phase—where fear is being overreacted to—despite the absence of any actual signs of a downturn in the semiconductor sector. However, there are also warnings that volatility may persist until foreign selling and hedge fund liquidations subside.