South Korean authorities probing two Japanese Bank branches
May 31, 2011‐ Seoul, Korea
South Korean Financial authorities are reported to be probing local branches of two Japanese branches mainly in regard to foreign currency-denominated bond issuances.
Media reports say that Financial Supervisory Service are probing in Mizuho Corporate Bank and Bank of Tokyo-Mitsubishi UFJ branches in South Korea since May 24, 2011 and is likely to be finished by June 2, 2011. Some media reports have been pointing out that are indeed some irregular book-keeping practices on currency derivatives trades.
The move to probe foreign currency transactions is to curb short-term borrowing from abroad. Experts feel that currency derivatives trading could destabilise capital inflows and outflows unless properly handled.
It may be recalled that in December 2010, the FSS had issued a warning to the local branch of British banking major, the Barclays Plc, for breaking banking and currency trade regulations. The JPMorgan Chase & Co was asked to be reprimand an official involved in improper currency trading.
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