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Antitrust watchdog sends investigators to Shinhan, Woori, Hana, KB Kookmin
The Fair Trade Commission has expanded its probe on the alleged collusion in setting certificate of deposit rates to major banks.
The antitrust watchdog sent investigation teams on Wednesday to four banks ― Shinhan Bank, Woori Bank, Hana Bank and KB Kookmin Bank ― on suspicions that they fixed interest rates of three-month certificates of deposit.
The move is a follow-up of the investigation into local brokerage firms on Tuesday on charges that they engaged in rigging CD rates. The FTC declined to confirm the details of the ongoing investigation, citing the agency’s policy.
News reports said the FTC is expanding the target of the probe as CDs are sold by local banks and are widely used as a benchmark for banks’ lending rates. The probe came as the CD rates remained relatively high while other market rates dropped. The rate remained unchanged at 3.54 percent for almost three months since March.
The CD rates in Korea are announced twice, at 11:30 a.m. and 3:30 p.m., every day after the Korea Financial Investment Association calculates the average of figures collected from the nation’s top brokerages.
Brokerages have denied the possibility of such a collusion, according to reports, arguing that there is nothing they can gain from it. Instead, the center of attention moved to banks as they are known to be more influenced by CD rates.
Officials from the banks declined to comment on Wednesday. They just said the investigations, which started in the morning, were still under way.
The Financial Supervisory Service, meanwhile, expressed regret that the FTC did not consult the financial watchdog prior to the probe.
Joo Jae-seong, a vice FSS governor, told the press on Wednesday that the financial authorities had been planning to improve the CD rate system since last year, and that the FSS in fact formed a taskforce to research the function and problems of CD rates and find ways to improve it in a systematic way.
“Ever since Britain’s LIBOR (London Inter-Bank Offered Rates) case broke out, we have been conducting research to catch hold of problems and propriety of CD rates. We are looking into it to improve the system rather than the rate-fixing part,” he told the press.
“When the results of the FTC’s investigations on banks and brokerage firms come out, we will take necessary measures,” he added.
Securities firms investigated by the FTC on Tuesday include Leading Investment & Securities, Dongbu Securities, Meritz Securities, Mirae Asset Securities, Woori Investment & Securities, Hana Daetoo Securities, Hanwha Securities, KB Investment & Securities, KTB Securities and LIG Investment & Securities.
By Park Min-young (claire@heraldcorp.com)
The Fair Trade Commission has expanded its probe on the alleged collusion in setting certificate of deposit rates to major banks.
The antitrust watchdog sent investigation teams on Wednesday to four banks ― Shinhan Bank, Woori Bank, Hana Bank and KB Kookmin Bank ― on suspicions that they fixed interest rates of three-month certificates of deposit.
The move is a follow-up of the investigation into local brokerage firms on Tuesday on charges that they engaged in rigging CD rates. The FTC declined to confirm the details of the ongoing investigation, citing the agency’s policy.
News reports said the FTC is expanding the target of the probe as CDs are sold by local banks and are widely used as a benchmark for banks’ lending rates. The probe came as the CD rates remained relatively high while other market rates dropped. The rate remained unchanged at 3.54 percent for almost three months since March.
The CD rates in Korea are announced twice, at 11:30 a.m. and 3:30 p.m., every day after the Korea Financial Investment Association calculates the average of figures collected from the nation’s top brokerages.
Brokerages have denied the possibility of such a collusion, according to reports, arguing that there is nothing they can gain from it. Instead, the center of attention moved to banks as they are known to be more influenced by CD rates.
Officials from the banks declined to comment on Wednesday. They just said the investigations, which started in the morning, were still under way.
The Financial Supervisory Service, meanwhile, expressed regret that the FTC did not consult the financial watchdog prior to the probe.
Joo Jae-seong, a vice FSS governor, told the press on Wednesday that the financial authorities had been planning to improve the CD rate system since last year, and that the FSS in fact formed a taskforce to research the function and problems of CD rates and find ways to improve it in a systematic way.
“Ever since Britain’s LIBOR (London Inter-Bank Offered Rates) case broke out, we have been conducting research to catch hold of problems and propriety of CD rates. We are looking into it to improve the system rather than the rate-fixing part,” he told the press.
“When the results of the FTC’s investigations on banks and brokerage firms come out, we will take necessary measures,” he added.
Securities firms investigated by the FTC on Tuesday include Leading Investment & Securities, Dongbu Securities, Meritz Securities, Mirae Asset Securities, Woori Investment & Securities, Hana Daetoo Securities, Hanwha Securities, KB Investment & Securities, KTB Securities and LIG Investment & Securities.
By Park Min-young (claire@heraldcorp.com)
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Articles by Korea Herald
