The regulator is preparing sanctions against 15 government bond primary dealers as banks already facing other probes and provisions dispute both the collusion finding and how any fine should be calculated.
South Korea's Fair Trade Commission is moving toward a decision on sanctions against 15 government bond primary dealers over alleged bid-rigging in government bond auctions from January 2020 to June 2023, with the key dispute centered on whether fines should be based on full winning bid amounts or operating revenue. FTC examiners estimated the affected bidding volume at about 76.2 trillion won and classified the case as a very serious violation, implying fines of 10.5% to 20% of relevant revenue; using winning bid amounts could theoretically lift total penalties to around 15 trillion won, though industry observers expect any final fine to be lower. The respondents, which include five banks and 10 securities firms, deny that their information sharing amounted to unlawful collusion and argue that primary dealers act as intermediaries for many institutions. The case has drawn particular attention because several banks are already carrying roughly 930 billion won in provisions tied to other regulatory matters, raising concerns about pressure on capital ratios and lending capacity.