Watchdog fines 4 foreign banks for currency swap collusion

SEJONG, March 11 (Yonhap) -- South Korea's antitrust watchdog said Wednesday that it has fined four foreign banks a combined 1.32 billion won (US$1.1 million) for collusion in bidding for currency swap deals with local firms.

The Fair Trade Commission (FTC) said the four banks -- Citibank Korea, the Hong Kong and Shanghai Banking Corp. (HSBC), Credit Agricole Corporate and Investment Bank and JP Morgan Chase & Co. -- colluded to rig four currency swap bids between January and September 2010.

South Korean companies involved in the currency swap deals include the state-run Korea Hydro & Nuclear Power Co. and Korea Expressway Corp., the operator of the country's highways.

A currency swap is an arrangement in which two parties exchange a specified amount of different currencies at an agreed future time.

Citibank Korea was slapped with the largest fine of 900 million won, HSBC with 387 million won and Credit Agricole Corporate and Investment Bank with 34 million won.

The FTC also ordered the three banks to take corrective measures. JP Morgan Chase & Co. was given only a correction order.

The corrective measures are meant to promote interbank competition in the local currency swap market, the watchdog said, adding it will crack down on unfair and competition-restricting practices.

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