A financial product with an unfamiliar name, DLS, is a big problem. For example, If the German Treasury bond rate stays at a certain level, it will yield about 5%. The problem is when the prediction is wrong. As interest rates fall, the principal is cut, and in severe cases, 100% of the total disappears.
Investors bought a trillion won worth of old people with old funds, but they are opposing whether they would have invested if they knew it was dangerous. So the financial authorities will start the investigation.
I am a reporter.
Woori Bank and Hana Bank are the two banks that have sold foreign interest-linked derivatives such as Germany and the UK. Combined with those sold through securities firms, sales amount to KRW 1 trillion.
Germany's Treasury bond yields, sold between March and May, will carry more than 90% of the principal if it is.
Interest rates have fallen to record lows as global economic instability has driven demand for German government bonds, safer assets, and bonds can be issued at lower rates.
Not only wealthy investors but also seniors who invested in retirement funds were found to be derivative investors.
[Mr. Kim / Investor: I invested only in safety products because it is old money, but I was relieved because I invested a lot of stable and lossless and retired elderly people.]
Some investors are also preparing for class action.
[Song-Sung-Hyun / Law: I've been in the bank for 10 years or 2-30 years, so I just believed it. It could be old money or a charter fund.]
The FSS, after completing a written investigation of the banks, will begin a full-fledged inspection this week.
We decided to look into whether there was no problem with the product design in the first place, whether the risk was properly communicated during the sales process, or how we responded to customers asking for a mid-term repurchase.
(Video Editing: Jeon Minkyu)
Interest-linked derivatives with 'one trillion bombs'… Crisis 90%
A financial product with an unfamiliar name, DLS, is a big problem. For example, If the German Treasury bond rate stays at a certain level, it will yield about 5%. The problem is when the prediction is wrong.