South Korea’s anti-trust watchdog said it has fined France’s BNP Paribas and Germany’s Deutsche Bank a combined 176 million won ($157,000) for colluding on foreign exchange forward bids.
The Fair Trade Commission said officials at the two bank’s Seoul branches colluded on prices of foreign exchange forwards, prior to 44 rounds of bidding worth $224 million for two local companies from April to July in 2011. The FTC did not reveal the names of the two local firms.
The two European companies took turns to win forward currency contracts, 22 each, from the two local firms which were hedging fluctuation risks of foreign exchange rates by buying currency derivatives, according to the FTC.
Due to their collusion, the two local firms had to pay higher costs for foreign exchange forwards than they would have paid without the banks’ collusion, the watchdog said.
This is the second Deutsche Bank has been punished by the competition watchdog for foreign exchange-related price-rigging. The bank was fined 13 million won last year for breaching competition rules in foreign exchange swaps in 2011. The bank was not available for comment.
BNP Paribas’ Seoul office spokesperson Judy Jung said the bank has fully cooperated with the FTC’s investigation.
“We have taken necessary actions to ensure all of our staff understand and comply with our global code of conduct. We take our commitment to clients and the Korean market very seriously and would never condone unlawful conduct by any of our staff,” Jung said.
According to the FTC, BNP Paribas was fined 105 million won, and Deutsche Bank 71 million won.
An FTC official at the FTC’s international cartel investigation division said Deutsche Bank did not receive additional punishment because the timing of the price rigging was 2011, prior to last year’s punishment.
He said the FTC’s latest investigation and the punishment it issued for breaching foreign exchange-related competition rules will curb unfair practices.
“We will continue to monitor the foreign exchange derivatives market to root out collusive acts and sternly punish those involved in collusion,” the FTC said.
By Kim Yoon-mi (firstname.lastname@example.org