South Korea’s anti-trust watchdog yesterday launched a probe into major local banks suspected of colluding to fix interest rates of certificates of deposit (CD), bank officials said.
The probe comes after news in Britain that Barclays and, allegedly, other banks manipulated the London interbank offered rate in an attempt to mask their financial problems, and in some cases to profit.
The Fair Trade Commission sent investigators to the headquarters of Kookmin, Woori, Shinhan and Hana banks, a day after it launched a probe into brokerage firms, bank officials said. Brokerages, which report CD rates twice a day, are suspected of colluding to fix rates on 91-day certificates.
Photo: Reuters
A CD is a way of saving with a specified fixed interest rate and maturity sold by banks and circulated in the secondary market by brokerages. The three-month CD rate is used as a benchmark in setting lending rates for financial products.
CD rates remained relatively higher than other market rates, although the Bank of Korea unexpectedly cut its policy rate to 3 percent last week.
Banks benefit from high CD rates as a bulk of household loans are tied to them.
Financial officials say household debts, which stood at 857 trillion won (US$752 billion) at the end of March, pose a downside risk to the economy amid a global economic slowdown and a sluggish domestic property market.
Many South Korean households rely on debts to buy a house and pay only the interest every month, paying back the principal when they sell the house. However, a weak property market often means they cannot make enough to pay back the principal when the loan is due.
Moody’s Investors Service said last month household loans have grown “at an alarming rate” and are vulnerable to financial shocks arising from the global economic downturn. More people are borrowing just to meet living expenses and there is an increase in borrowers from the older age group and lower income group, it said.
Merida Industry Co (美利達) has seen signs of recovery in the US and European markets this year, as customers are gradually depleting their inventories, the bicycle maker told shareholders yesterday. Given robust growth in new orders at its Taiwanese factory, coupled with its subsidiaries’ improving performance, Merida said it remains confident about the bicycle market’s prospects and expects steady growth in its core business this year. CAUTION ON CHINA However, the company must handle the Chinese market with great caution, as sales of road bikes there have declined significantly, affecting its revenue and profitability, Merida said in a statement, adding that it would
MARKET LEADERSHIP: Investors are flocking to Nvidia, drawn by the company’s long-term fundamntals, dominant position in the AI sector, and pricing and margin power Two years after Nvidia Corp made history by becoming the first chipmaker to achieve a US$1 trillion market capitalization, an even more remarkable milestone is within its grasp: becoming the first company to reach US$4 trillion. After the emergence of China’s DeepSeek (深度求索) sent the stock plunging earlier this year and stoked concerns that outlays on artificial intelligence (AI) infrastructure were set to slow, Nvidia shares have rallied back to a record. The company’s biggest customers remain full steam ahead on spending, much of which is flowing to its computing systems. Microsoft Corp, Meta Platforms Inc, Amazon.com Inc and Alphabet Inc are
RISING: Strong exports, and life insurance companies’ efforts to manage currency risks indicates the NT dollar would eventually pass the 29 level, an expert said The New Taiwan dollar yesterday rallied to its strongest in three years amid inflows to the nation’s stock market and broad-based weakness in the US dollar. Exporter sales of the US currency and a repatriation of funds from local asset managers also played a role, said two traders, who asked not to be identified as they were not authorized to speak publicly. State-owned banks were seen buying the greenback yesterday, but only at a moderate scale, the traders said. The local currency gained 0.77 percent, outperforming almost all of its Asian peers, to close at NT$29.165 per US dollar in Taipei trading yesterday. The
The US overtaking China as Taiwan’s top export destination could boost industrial development and wage growth, given the US is a high-income economy, an economist said yesterday. However, Taiwan still needs to diversify its export markets due to the unpredictability of US President Donald Trump’s administration, said Chiou Jiunn-rong (邱俊榮), an economics professor at National Central University. Taiwan’s exports soared to a record US$51.74 billion last month, driven by strong demand for artificial intelligence (AI) products and continued orders, with information and communication technology (ICT) and audio/video products leading all sectors. The US reclaimed its position as Taiwan’s top export market, accounting for
RSS