[Friendly economy] lose all the principal… What's the "Trillion Bomb" DLS Issue?
Friendly economy, this week with reporter Kwon Ae-ri. The controversy has been growing lately because of certain funds sold by Kwon, banks and securities firms. Yes. Those who invested in a DLS fund investing in Europe are now in urgent need to lose all their funds.
Friendly economy, this week with reporter Kwon Ae-ri. The controversy has been growing lately because of certain funds sold by Kwon, banks and securities firms.
Yes. Those who invested in a DLS fund investing in Europe are now in urgent need to lose all their funds.
What is DLS? What kind of target is DLS? If the circumstances of the target are met, it is a financial instrument that pays interest as promised.
The targets can be stock prices, interest rates, gasoline or rice.
For example, the price of rice sold in Korea this year will be between 150,000 won and 250,000 won, so that at the end of the year I'll add 7% interest to the money entrusted to you by the end of the year. Will
But, I thought it was, but at the end of the year, the price of rice was 300,000 won. In this case, you may see a loss of principal rather than 7% interest.
The DLSs at issue now are a serious case of this. Subject to these and other interest rates in many European countries, they would give you 5% interest if they did not fall below a certain level during the promised period.
But European interest rates plunged this year. Out of condition Far from interest, some people have lost their principals.
The problem is that some people have put old funds in these funds, but how much are they going to lose or lose?
The total investment worth worrying about is about 1 trillion won. These funds in question were sold by KEB Hana Bank and Woori Bank.
KEB Hana Bank's funds have been selling since last fall, but there are cases where the principal loss is likely to be high.
So you can't see a loss right now, but it's also a situation where it can be like a bomb that has been delayed.
The biggest problem right now is the German government bond DLS fund sold by Woori Bank.
There are now 120 billion won worth of goods sold this spring that offered to pay interest if the 10-year German bond yield fell below -0.2%.
But just one month later, September 19, the maturity begins to return, and it cannot be extended.
In fact, German government bond yields don't go all the way down. But this year it happened. In Europe, the German economy's bond yields have fallen to near -0.7%, to record lows, as the economy is in poor shape and continues to cut interest rates.
At -0.7, the fund is 100% lost. So these Woori Bank funds are in a state where they can't get a penny if they are.
As the problem got worse, the Financial Supervisory Service conducted an investigation?
Yes. We will announce the paperwork today and start a special investigation this week.
The first issue is whether the bank properly explained to the customers that it could be such a big loss.
There are no bank products that can get 5% interest these days. That's why a lot of rich customers have signed up, but some of them have been in charge of retirement funds as Anchor said.
We will emphasize the aspect of safety because the target of the condition is government bonds of developed countries, and we will focus on those areas where people who leave their old money without explaining the risks.
And especially this spring, when Woori Bank began selling this product, the global economy is getting worse, Europe is hard, it was already.
It's a commodity that has begun to sell over a certain period when there is anxiety that European interest rates will continue to fall.
At the same time, there were banks that stopped selling similar products while watching the global economy go back.
And when German interest rates began to fall before now, should I buy back now and minimize the damage? The financial authorities will also see whether they have been actively instructing the investors they ask.
These financial instruments can be dangerous, they can be lost, and it's very important that you actively guide them.
In fact, more complex derivatives, such as DLS, are harder to judge by the average person. How much more should I tell you?
Anyway, whenever we have a financial problem that is close to such an accident, we look back, hoping for the most reasonable solution.