More lenders to be probed

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More lenders to be probed

Hana Bank and Societe Generale SA will be investigated along with the Australia & New Zealand Banking Group (ANZ) in Korea’s probe of currency forwards holdings, according to a central bank official.

The bank official, who preferred to remain anonymous, said the review of each lender will take about four days. The Financial Supervisory Service along with the Bank of Korea said they would be reviewing holdings of currency forwards on Oct. 30, without identifying the lenders they planned to investigate. The review of ANZ started Monday, while those for the other two banks will begin later this week, according to the unnamed official.

Reuters also reported yesterday, citing an unidentified financial regulator official, that ANZ, Hana and Societe Generale would be investigated. An ANZ spokeswoman in Hong Kong, who asked not to be identified, was unable to comment on the matter when contacted by Bloomberg.

Kang Kyung-moon, a Seoul-based spokesman at Hana Financial Group, the parent of Hana Bank, declined to comment on the probe. Kate Henley, a Hong Kong-based spokeswoman for Societe Generale, also would not comment.

In June 2010, Korea first announced rules to curb trading in foreign exchange derivatives to reduce the won’s volatility. Branches of overseas banks were required to reduce currency forward holdings to 250 percent of equity capital and local banks to 50 percent. The limits were slashed last year to 200 percent and 40 percent, respectively.

According to Bloomberg, the won rallied 4.9 percent this half and is the best performing Asian currency in the 11 top-traded currencies.

Central bank Gov. Kim Choong-soo told lawmakers on Oct. 24 that the won’s appreciation has been “a bit bigger” than that of other currencies in the region.

Bloomberg

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