Taiwan punished Deutsche Bank AG and three other foreign lenders after an investigation into speculation about the rising local currency last year involving grain companies.
Deutsche Bank’s trade approvals for prepaid and non-deliverable forwards in Taiwan will be revoked, and it will be banned for two years from conducting currency – derived transactions, the island’s central bank said in a statement on Sunday.
ING Groep NV and Australia and New Zealand Banking Group Ltd. will not be allowed to trade forward and non-deliverable futures for nine months, while Citigroup Inc. is banned from delivering pre-trade in Taiwan for two months, the central bank said. The fines imposed on the local units come into effect on Monday.
The banks were notified of the penalties on Friday. Trading done before the notice will not be affected, the central bank said.
Citigroup declined to comment. Deutsche Bank, ING and ANZ did not immediately respond to calls commenting outside office hours.
Eight of Asia’s leading food retailers, with the help of six overseas banks, have accumulated a combined $ 11 billion in their Taiwanese deliverable positions since the end of July, the central bank. said last month. The positions were based on overseas physical grain trading that is deliberately done via their Taiwanese units to speculate on the local currency, which affects the market stability.
Cargill Inc. and Louis Dreyfus Co. was involved, together with, among others, Deutsche Bank, Citigroup, JPMorgan Chase & Co. and Standard Chartered Plc, Bloomberg News reported in January, citing people with knowledge of the case. The celebrities have designed at least some of the industries specifically to take advantage of the rising Taiwanese dollar.
The dollar’s island has strengthened nearly 7% against the US dollar over the past twelve months, among the best performers in the region, according to Bloomberg data.
The central bank settled with two lenders in November, he said Sunday without identifying it. The six banks violated the rules because the forward transactions had to be done based on their actual needs, the central bank said on Sunday.
According to Eugene Tsai, the director general of the central bank of the foreign exchange department, Deutsche Bank may apply for the withdrawn trade approvals again in the future.
The central bank of Taiwan strictly regulates how many foreign companies can build up dollars to avoid speculation about the currency. It said that the large positions that the commodity companies have built up in productive forwards go beyond their actual business needs.
– With the help of Argin Chang
(Updates with sin from fifth paragraph.)