Standard Chartered Bank has been slapped with £46.55 million by the Prudential Regulation Authority (PRA). The penalty imposed on the financial giant is the highest fine that the PRA has ever issued on a case conducted independently by the regulatory body.
The fine that was initially imposed on Standard Chartered was £66.5 million. However, the bank agreed to resolve the issue with the regulatory body; hence it qualified for a 30% reduction in the imposed fine.
The statement from PRA further noted that “failing to be open and cooperative with the PRA and for failings in its regulatory reporting governance and controls concerning a tailored PRA liquidity expectation.”
The PRA stated that in October 2017, it added a temporary expectation on SCB involving liquidity. This was to help address the concerns of an increased risk of liquidity outflows involving the US dollar, otherwise known as the liquidity metric. However, the expectation was temporary and has since been taken down.
The PRA noted that between March 2018 and May 2019, the overall liquidity position for Standard Chartered was in surplus compared to its core liquidity requirements. However, during this time, the bank made five errors when reporting the liquidity metric, which denied regulators a clear view of the US dollar’s liquidity.
Standard Chartered only reported errors after investigations
The PRA further added that Standard Chartered did not willingly report the errors. It only reported the errors in its reporting after the regulatory body conducted a four-month investigation into the bank’s financials.
The CEO and Deputy Governor for prudential regulations at PRA, Sam Woods, noted that the regulatory body expected full compliance from financial institutions. “We expect firms to notify us promptly of any material issues with their regulatory reporting, which Standard Chartered failed to do in this case.”
Woods noted that the regulatory body did not expect Standard Chartered to fail in its regulatory reporting given its size and stature. “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 in this case,” Woods added.