Bankers in South Korea to face ‘unprecedented’ 2am finishes as won trading reforms take effect
- Many Korean banks did away with night shifts after the Asian financial crisis of 1997, as swings between losses and gains ‘became too big’
- But now some are bringing them back amid the government’s push for round-the-clock trading of the Korean won. Others are relocating staff overseas
Most large South Korean banks plan to set up night shifts when won trading hours are extended this year, bringing back a relic from the 1990s that had disappeared due to changes in working conditions.
Shinhan Bank started rostering traders to work nights in September, while Korea Development Bank, Woori Bank, Industrial Bank of Korea and NongHyup Bank have all taken steps toward doing the same. Suhyup Bank is planning to add more staff without specifying whether they will work at night.
“We are analysing our middle and back offices along with IT and other related departments and preparing for any risks that may emerge in the first stages of the FX market reform,” Industrial Bank said in a statement.
The lengthening of won trading hours is part of South Korea’s bid to improve access and boost the case for its equities to be included in MSCI’s developed-market stock index. The authorities said in February they ultimately want the won to trade 24 hours.
Many Korean banks operated nights shifts up until the early 2000s with staff making foreign-exchange margin trades and catering for demand from local companies. Then came the Asian financial crisis beginning in 1997.
“Swings between losses and gains became too big, and the act of trading itself became difficult as we went through the financial crisis,” said EJ Ethan Seo, head of global markets at BNP Paribas in Seoul. “When I started trading in 2002, night desks were nearly gone.”