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FSS looks into forex trading records of local banks

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The headquarters of the Financial Supervisory Service in Yeouido, Seoul / Yonhap
The headquarters of the Financial Supervisory Service in Yeouido, Seoul / Yonhap

By Anna J. Park

The Financial Supervisory Service (FSS) has begun investigating the foreign exchange trading records of local banks following abnormal foreign currency trading activities amounting to 800 billion won ($616 million) spotted at one Woori Bank branch in Seoul during the past year.

Suspicions were aroused when an exceptionally high volume of foreign exchange trading ― more than 145 times the average ― occurred at a single bank branch.

Since noticing the suspicious trading records during an internal audit, the bank reported the case to the financial authority for further investigation. Upon receiving the report, the FSS launched an on-site investigation into the branch late last month.

The financial watchdog agency also began investigating Shinhan Bank, which reported similar abnormal foreign exchange trading activities.

While the FSS is looking closely into the cases to see whether the transactions violated the country's anti-money laundering laws and foreign exchange transactions act, the financial authority has ordered other local banks to conduct internal inspections regarding their foreign exchange trading records.

"As abnormal levels of foreign exchange transactions were detected at some banks, including Woori Bank, the FSS urged all banks to conduct their own internal inspections," an official from the FSS said.

Based on the banks' reporting of their internal audit results, the FSS plans to look further into such cases.

At his inaugural speech early last month, FSS Governor Lee Bok-hyun stressed the need to apply strict standards when it comes to acts of market disturbance and he repeated that stance during a meeting with the heads of local banks. As a result, the financial watchdog agency is expected to conduct thorough inspections and take punitive measures if needed.


Park Ji-won annajpark@koreatimes.co.kr


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