The antitrust regulatory body in South Korea responsible for ensuring a level playing field across all sectors of the economy, announced that it is probing a number of major banks for manipulating currency rates.
Any unfair cartel-style practice would fall into the Fair Trading Commission’s jurisdiction as it is aiming to create a competitive environment for South Korean SMEs.
The tactics used by a number of major banks involved in foreign exchange markets rigging include the exchange of confidential information which has been unfairly used by the financial institutions to manipulate currency rates.
While officials haven’t disclosed all banks affected, sources with knowledge of the matter say that Barclays Plc and Bank of America are amongst the financial institutions involved. The Fair Trading Commission of South Korea is aiming to establish whether any Korean firms were affected by the malpractice of some major banks engaged in rigging foreign exchange fixings.
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Recently, the South African regulator also launched an investigation on similar grounds, however no charges have been raised until now.
Some experts have shared that the scale of the fresh investigations brought forth by the banks admitting to wrongdoing in other jurisdictions could be massive. Global banks have been on the hook for billions of dollar of fines as a result of investigations of their market practices.
Both the LIBOR and FX fixings manipulations have affected a number of firms, including pension funds and big corporations which got hit by unfavorable exchange rates. The guilty pleas which major banks have agreed to in the U.S. are effectively serving as proof for regulators in other jurisdictions that market manipulation was present.
There is no information on the number of different government regulatory bodies which are going to pursue further action against the world’s biggest financial institutions.