The Ministry of Economy and Finance (MOEF) and the Bank of Korea (BOK) have selected the following seven Foreign Exchange (FX) banks as FX leading banks for the won-dollar trading market in 2025; Kookmin Bank, Nonghyup Bank, Korea Development Bank, Shinhan Bank, Woori Bank, Hana Bank, Standard Chartered Bank Korea. This year, Nonghyup Bank and Standard Chartered Bank Korea have been newly selected, while JP Morgan Chase Bank and Crédit Agricole Bank, which were last year’s leading, have been excluded.
Since the official implementation of the ‘Improvement Measures for FX Market Structure’ in July 2024, the average daily trading volume has been progressing smoothly, with the volume of the second half of last year (July to December) up by 8.6% compared to the previous year (a 36% increase compared to the average of the past five years). However, the FX authorities believe that in order to secure a stable and continuous level of liquidity during the extended trading hours, the active trading and market-making roles of leading banks are even more important. As a follow-up to the decision made at the Foreign Exchange Stability Council (chaired by 1st Vice Minister of Economy and Finance) in August of last year, the criteria for selecting leading banks have been revised and applied. In the process of calculating the trading performance for selecting leading banks this year, differential weighting was applied based on time periods; trades executed between 18:00 and 22:00 were given double the weight of those executed between 09:00 and 18:00, while trades executed between 22:00 and 02:00 the next day were given three times the weight. This approach aims to encourage banks to participate in trading more actively during the nighttime hours.
In addition, the FX authorities are in the process of making adjustments to the Macro-prudential Stability levies deduction system that applies to leading banks. After 2026, the deduction amount for leading banks will be calculated based on ‘market-making’ trading performance, which refers to trades executed by quoting (bid and ask prices) rather than bidirectional trading performance. The limit for deductions under this category will also be expanded from 10% or more to 15% or more of the amount subject to levies. The draft amendment to the Foreign Exchange Transaction Regulations containing these changes was announced for public notice last week, and the relevant provisions are set to be applied starting in 2026.
MOEF and the BOK plan to continue providing policy support to ensure that leading banks actively participate in market-making and the revitalization of extended trading hours, thereby contributing to the expansion of the breadth and depth of the FX market in Korea.
Please refer to the attached files.
