South Korea Fines Banks $1.2 Billion for Bond Collusion

The Korea Fair Trade Commission imposed a record 1.63 trillion won ($1.2 billion) fine on more than a dozen domestic banks and brokerages for colluding in government bond auctions. The penalty follows a yearlong investigation into the conduct of primary dealers within South Korea's bond market, which is valued at approximately 1,261 trillion won ($942 billion).

Regulators found that the financial institutions exchanged bid-yield information or reached agreements on yields and volumes across 150 Korean Treasury Bond auctions between January 2020 and June 2023. The commission specifically determined that agreements on specific bid yields or volumes occurred in 145 of those auctions.