Korea’s watchdog probes effects of market rigging on local firms
Record number of fines
SOUTH Korea’s Fair Trade Commission (FTC) is probing how alleged foreign exchange market rigging by six global banks, including Barclays and Bank of America, may have hurt Korean firms.
The commission was reviewing whether the activities of six global banks that were fined by the US and the UK had affected South Korean firms, chairman Jeong Jae Chan said yesterday, without naming the banks.
South Africa
Barclays, Bank of America, Citigroup, JPMorgan Chase, Royal Bank of Scotland Group and UBS Group agreed to pay a combined $5.8 billion (R72bn) in a settlement announced by the US Justice Department last month, with five pleading guilty to charges tied to a currency-rigging probe. STIFFER fines for banks caught trying to rig markets had not undermined financial stability or lenders’ ability to stay solvent, a British regulator said yesterday.
Georgina Philippou, the acting director of enforcement at the Financial Conduct Authority (FCA), dismissed criticism that recent penalties totalling billions of pounds were damaging the stability of the industry.
The FCA has been levying record amounts of fines, saying previous sanctions failed to have an impact. Spokesmen for the declined to comment.
The probe into the manipulation of foreign exchange
firms
“We don’t consider that fines in the UK are anywhere near that level,” Philippou said. “Our fines are related to profits from misconduct… even then we are a long way from undermining financial stability.”
Bank of England deputy governor Andrew Bailey said regulators from the US and elsewhere should co-ordinate how they levied fines to avoid making it harder to rebuild banking system strength.
“Nobody is saying that credible deterrence is easy,” Philippou said. “We are trying to change behaviour and some of it has been ingrained in market practices.” rates is spreading beyond the US and Europe. South Africa’s Competition Commission said last month it was investigating firms including JPMorgan and Citigroup over allegations that traders colluded to rig the rand.
In December, the Hong Kong Monetary Authority said after a year-long investigation that it had found no evidence of collusion among banking groups nor any rigging of the benchmark exchange rate fixings, though it had uncovered failed attempts at manipulation.
The Monetary Authority of Singapore has said that it has been in contact with foreign regulators over currency manipulation and that the watchdog has been looking into any allegations of “inappropriate behaviour”.
South Korea’s FTC is responsible for regulating fair competition between companies, including the protection of consumers from monopolies and abuse of market power.
The FTC is currently investigating the licensing business of Qualcomm, a company that the watchdog previously fined 260 billion won (about R3bn), for deterring competition. – Bloomberg