Taiwan Sanctions affected branches of major international banks against the backdrop of an investigation conducted by the authorities in Taiwan regarding the banks ’assistance to eight companies to enter into speculation on the Taiwan dollar.
Taiwan has sanctioned the German bank, Deutsche Bank, and 3 other foreign banks after an investigation into speculation about the appreciation of the local currency last year.
On Sunday, Taiwan’s central bank said it had banned Deutsche Bank from trading non-deliverable Taiwan dollar futures and suspended its foreign exchange derivatives for two years as part of a crackdown on speculation.
The Taiwan dollar is at its highest level in more than 23 years against its US counterpart, with the boom in the island’s trade-dependent economy thanks to global demand for its technology products, as people resort to working from home.
The central bank is particularly concerned about a case it says foreign banks have helped grain companies enter into currency speculation via deliverable futures contracts, affecting the stability of the Taiwanese exchange market.
Sources told Reuters on Friday that the central bank had sent letters of sanctions to Deutsche Bank, CitigroupInc, Dutch ING and Australia and New Zealand Banking Limited, ANZ, for their involvement in the matter.
Apart from the penalty imposed on the Taipei branch of Deutsche Bank, the central bank said in a statement that the ING and Australia New Zealand banking group would be banned for nine months from trading non-deliverable non-deliverable Taiwan dollar futures contracts.
He added that the “City” office in Taipei will also be banned from trading in Taiwan’s two-month deliverable dollar futures contracts.
The central bank said that the sanctions will be in effect tomorrow, Monday, while the Citi Group declined to comment, and representatives of the other three banks have not yet responded to a request for comment.
The head of the central bank’s foreign exchange department, Eugene Tsai, told Reuters the sanction on Deutsche Bank meant it would not be able to trade currency options or swap contracts.
Last month, the central bank announced an investigation into the case, in which it said 8 grain trading companies were involved.
Malay News
International Desk
