South Korea's household debt balance reached 2,019.8 trillion won, approximately 9.73 trillion yuan, at the end of the second quarter of 2026, exceeding 2,000 trillion won for the first time. Preliminary data released by the Bank of Korea on Aug. 19 showed a quarterly increase of 25.9 trillion won, the largest since the third quarter of 2021 and the ninth consecutive quarterly rise. Household loans totaled 1,891.3 trillion won, including 1,190.8 trillion won in mortgage loans and 700.5 trillion won in other loans such as unsecured credit and overdraft accounts. Other loans rose 12.8 trillion won, exceeding the 12.2 trillion won increase in mortgages for the first time since the second quarter of 2021, with the Bank of Korea attributing the increase mainly to stock investment demand. The shift reflects the growing role of borrow-to-trade activity among South Korean retail investors. The KOSPI gained 67.77% in Q2 to close at 8,476.48 after reaching a record 9,385.59, while retail investors expanded their use of credit loans, overdrafts and leveraged ETFs. Margin calls later triggered forced selling, and Citibank estimated losses on leveraged ETF investments at at least 58 trillion won. Although retail participation declined in July, margin loan balances rose again in August, and South Korean investors continued buying leveraged semiconductor products in U.S. and Japanese markets. Samsung Electronics and SK Hynix remain central to the market and economy, with Samsung's minority shareholders reaching 7.971 million and the two companies accounting for 55.7% of the National Pension Service's major Korean equity holdings by value. The convergence of record household debt, renewed margin borrowing and concentrated exposure to the two semiconductor companies has tightened the link between South Korea's economy and its stock market.