South Korea probes forex market rigging by global banks

GMT 15:25 2015 Wednesday ,17 June

Arab Today, arab today South Korea probes forex market rigging by global banks

The Fair Trade Commission
Seoul - AFP

South Korea's anti-trust watchdog said Wednesday it has opened an investigation to see whether alleged foreign-exchange market rigging by six global banks fined in a US and Europe forex probe hurt local firms.

Fair Trade Commission head Jeong Jae-Chan told a parliamentary hearing that JP Morgan and five other international lenders have been under investigation.

"We are closely looking into how (their) foreign currency price fixing has affected local businesses," he said.

He provided no further details but South Korean newspapers said the six banks under investigation included Barclays, Bank of America, Citigroup, JP Morgan Chase, Royal Bank of Scotland and UBS.

The commission is probing whether manipulation of the price of US dollars and euros, and of derivatives markets, damaged South Korean financial institutions and firms, the Seoul Economic Daily reported.

Last month US and British regulators fined six major banks -- Barclays, JPMorgan Chase, Citicorp, Royal Bank of Scotland, UBS and Bank of America -- a total of nearly $6 billion between them for rigging foreign exchange market and Libor interest rates.

Also in May South Africa's competition watchdog opened an investigation into foreign currency price fixing by Citigroup, Barclays, and other banks.

Investigators have accused the banks of creating "The Cartel" and of using an online chat room to work with each other to set rates and sidetrack any competition.

There has been speculation that foreign exchange market rigging impacted local euro and dollar trade as well as various derivatives, resulting in losses for South Korean firms and financial institutions, Yonhap news agency said.

It quoted market watchers as saying that domestic firms, which applied for "knock-in, knock-out" options, may have lost money because rigging caused exchange rates to fluctuate beyond pre-set barriers.


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