Taiwan punished Deutsche Bank AG and three other foreign lenders after examining profitability over last year’s local currency in which grain companies were involved.
Deutsche Bank’s trading licenses for transferable and non-deliverable Taiwanese dollars will be revoked, and it will be banned from engaging in foreign exchange derivatives transactions for two years, the central bank said. island in a statement Sunday.
ING Groep NV and Australian & New Zealand Banking Group Limited will not be allowed to engage in Taiwan dollar carry forward and forward trade that cannot be delivered for nine months, while Citigroup Inc. banned from carrying Taiwan dollar for trade for two months, the central bank said. The penalties imposed on local units will take effect on Monday.
The banks were notified of the penalties on Friday. This will not affect the trades made before the betrayal, the central bank said.
Citigroup declined to comment. Deutsche Bank, ING and ANZ did not immediately respond to calls seeking an out – of – hours comment.
Eight major Asian food traders, with the help of six foreign banks, raised a combined $ 11 billion in their advanced positions given in Taiwan at the end of July, the central bank said last month. The positions were based on overseas corporate grain trades made deliberately through their Taiwanese units to profit the local currency, impacting market stability, he said.
Cargill Inc. and Louis Dreyfus Co. involved, along with Deutsche Bank, Citigroup, JPMorgan Chase & Co. and Standard Chartered Plc among others, Bloomberg News reported in January, citing people with knowledge of the case. At least some of the trades were designed specifically to make a profit from the rising Taiwan dollar, the experts said.
The island’s dollar has strengthened nearly 7% against the U.S. dollar over the past 12 months, among the region’s top players, according to Bloomberg data.
The central bank settled with two lenders in November, it said Sunday, without recognizing them. The six banks were violating rules because the forward trades had to be based on their needs, the central bank said Sunday.
Deutsche Bank may reapply for the revoked trading licenses in the future subject to developments, according to Eugene Tsai, the central bank’s director general in the Department of Foreign Trade.
Taiwan’s central bank strictly controls how many dollars foreign companies can accumulate to avoid profiting on the currency. They had said that the large roles of the goods companies built in forward delivery went beyond their business needs.
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