Standard Chartered has become the latest bank to be punished by regulators after it was fined £46.5million.
The Prudential Regulation Authority (PRA), which is overseen by the Bank of England, said the FTSE 100 lender repeatedly misreported its liquidity position and failed to be ‘open and cooperative’.
This was the largest fine that the PRA ever imposed in any case it was involved as the watchdog.
According to the Prudential Regulation Authority (BoE), Standard Chartered has repeatedly reported its liquidity situation as incorrect and is not being ‘open and cooperative’.
Following a string of recent penalties against banks such as HSBC, NatWest and others, the fine is now in effect.
Standard Chartered was accused of making five errors when reporting a liquidity measurement, which is a key indicator of financial health, between March 2018 & May 2019.
Because of this, it wasn’t easy to know how secure the company’s finances were.
After a lengthy four-month investigation, the PRA was not notified by the bank of the error.
The punishment is humiliating for chief executive Bill Winters, who was in charge at the time of the mistakes, and for Standard Chartered’s head of regulatory affairs, former Financial Conduct Authority boss Tracey McDermott.
The penalty comes two months after the Reserve Bank of India slapped the company’s Indian arm with a minor fine for breaking rules on reporting frauds.
And it follows an embarrassing few weeks for British banks with HSBC fined £64million and NatWest £265million for lax anti-money laundering controls. The investigations were conducted by Financial Conduct Authority (a City watchdog).
HSBC had a list of failures in its anti money laundering systems, which may have enabled terrorist financiers, fraudsters or modern-day slavers to remain undetected for up to eight years.
Humiliation
And NatWest was fined after admitting it failed to prevent one company laundering around £365million.
Criminals deposited sums of cash – sometimes in black bin bags so full they would split – in dozens of branches.
At the start of December HSBC, Barclays and NatWest were also forced to pay huge fines to the European Commission for their roles in a foreign currency trading cartel through a chatroom named ‘Sterling Lads’.
Standard Chartered’s largest ever fine was an £842million settlement with US and UK financial authorities in 2019 for breaching anti-money laundering regulations and trading with countries such as Iran and Syria, violating sanctions.
Sam Woods, chief executive of the PRA, said: ‘Standard Chartered’s systems, controls and oversight fell significantly below the standards we expect of a systemically important bank, and this is reflected in the size of the fine.’
The penalty from the PRA was originally £66.5million, but this was cut by around 30 per cent because Standard Chartered agreed to settle.
The PRA had been keeping an eye on Standard Chartered because in 2017 the regulator had placed a more stringent requirement on the bank’s US dollar holdings.
They were concerned by the dollar amount that was left to the lender in the past year. The bank needed to have a large buffer just in case any more were taken.
Standard Chartered is based in the UK and listed on the London Stock Exchange’s FTSE 100 index. But it does most of its business in Asia – with Hong Kong its biggest market worldwide – and Africa.
A Standard Chartered spokesman said the bank ‘accepts the findings’ of the PRA, adding that it ‘has cooperated with the PRA’s investigation and has made significant improvements to and substantial investment in its liquidity and regulatory reporting processes and controls and remains committed to accurate regulatory reporting’.