South Korea Probe on Rigged Rates Widens to Banks, Officials Say
South Korea’s four biggest banks are being probed by the nation’s antitrust agency as it widens an investigation into whether brokerages colluded on a key money- market rate, according to officials at the lenders who were briefed on the matter.
Fair Trade Commission staff visited the headquarters of the banking units of Hana Financial Group Inc. (086790), KB Financial Group Inc. (105560), Shinhan Financial Group Co. and Woori Finance Holdings Co. today to meet with employees and review documents tied to rates including certificate of deposit charges, the four people said, asking not to be named as they aren’t authorized to speak to the press on the issue.
Kim Hyung Bae, a spokesman for the FTC, declined to comment on the probe. Press officials at the four banks also declined to comment in e-mailed replies to queries.
South Korea’s 91-day certificate of deposit rate is a benchmark for banks’ variable rate for lending and borrowing as well as for interest swaps or floating yields for bonds. Quotes are collected twice a day by the Korea Financial Investment Association, or KOFIA, from ten brokerages. The highest and lowest two are eliminated and the remaining are averaged.
Some South Korean brokerages are under investigation by the commission on whether they collaborated to keep the certificate of deposit rates artificially high, press officials at three brokerages with knowledge of the matter said yesterday.
MoneyToday reported earlier today that the FTC began investigating the four banks. The Korean-language online news provider cited unidentified financial industry officials.
To contact the reporter on this story: Seonjin Cha in Seoul at firstname.lastname@example.org
To contact the editor responsible for this story: Chitra Somayaji at email@example.com