On June 8, the won-dollar exchange rate and KOSPI index are displayed on the dealing room board at Hana Bank in Jung-gu, Seoul. [Photo=Yonhap News]
The Bank of Korea and the Financial Supervisory Service announced on June 10 that they will begin a joint inspection of major foreign exchange banks in response to the recent surge in the won-dollar exchange rate.
According to relevant authorities, the joint inspection will commence today and will involve both written and on-site examinations.
This initiative follows an emergency market situation assessment meeting held on June 7, and inspections will be conducted based on Article 20 of the Foreign Exchange Transactions Act and Article 35 of its enforcement decree.
Recently, the won-dollar exchange rate has fluctuated significantly, remaining in the 1,500 won range for 16 trading days due to risks in the Middle East and foreign capital outflows. As a result, foreign exchange authorities are increasing scrutiny of potential market disruption and speculative trading activities.
The Bank of Korea and the Financial Supervisory Service plan to focus on whether foreign exchange banks have engaged in activities that disrupt market stability, such as manipulating or fixing exchange rates for improper gains or to provide undue benefits to third parties.
Specifically, they will examine cases where transactions were conducted to disrupt market functions or hinder the price discovery process, as well as instances of one-sided trading that exceeded customer order volumes to induce unfavorable price fluctuations for clients.
If any violations are identified as a result of the joint inspection, the relevant authorities will take strict action in accordance with applicable laws.
According to relevant authorities, the joint inspection will commence today and will involve both written and on-site examinations.
This initiative follows an emergency market situation assessment meeting held on June 7, and inspections will be conducted based on Article 20 of the Foreign Exchange Transactions Act and Article 35 of its enforcement decree.
Recently, the won-dollar exchange rate has fluctuated significantly, remaining in the 1,500 won range for 16 trading days due to risks in the Middle East and foreign capital outflows. As a result, foreign exchange authorities are increasing scrutiny of potential market disruption and speculative trading activities.
The Bank of Korea and the Financial Supervisory Service plan to focus on whether foreign exchange banks have engaged in activities that disrupt market stability, such as manipulating or fixing exchange rates for improper gains or to provide undue benefits to third parties.
Specifically, they will examine cases where transactions were conducted to disrupt market functions or hinder the price discovery process, as well as instances of one-sided trading that exceeded customer order volumes to induce unfavorable price fluctuations for clients.
If any violations are identified as a result of the joint inspection, the relevant authorities will take strict action in accordance with applicable laws.
* This article has been translated by AI.
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