According to South Korean media reports, 15 South Korean financial institutions may face sanctions from the Fair Trade Commission (FTC) for allegedly manipulating bid prices in an auction of approximately 76 trillion won in government bonds. The FTC determined that these financial institutions colluded to manipulate government bond bidding rates beforehand, constituting a "serious violation," and warned of potential fines of up to 15 trillion won. However, the financial investment industry countered this, arguing that "classifying market-making activities conducted within the framework of government regulations as market collusion is an overinterpretation." The FTC stated on the 6th that it had sent investigation reports to the 15 financial institutions and initiated sanctions review procedures. According to the FTC's investigation, the 15 financial institutions exchanged information during competitive government bond auctions over a period of approximately three and a half years, from January 2020 to June 2023, including coordinating bidding rates in advance. A FTC official stated, "This was not a simple routine communication, but involved specific and frequent agreements and information exchanges regarding bidding rates." The official added that investigators believe this collusion has already impacted the government bond market.
