Korea’s largest-ever antitrust fine will cut into this year’s earnings at the brokerages and banks that underwrite government debt, but it is unlikely to weaken their capital buffers, according to Korea Investors Service (KIS), a Moody’s affiliate. In a report released earlier this week, the credit rating agency said the penalties imposed by the Korea Fair Trade Commission (FTC) will make “a short-term decline in profitability unavoidable,” especially at the firms facing the largest penalties. It added that their capital strength and the earnings they built up in the first half should be enough to absorb the cost, creating a formidable yet manageable financial hurdle for the country's primary financial institutions. The regulatory crackdown stems from an investigation into primary dealers in Korea's sovereign debt market. The FTC issued corrective orders on Wednesday and imposed roughly 1.6 trillion won ($1.2 billion) in combined fines on 15 financial institutions — all designated primary dealers responsible for underwriting Korea Treasury bonds — for restricting competit