Economy
Banking regulator fines RBS £5.6m for inaccurate transaction reporting
The Royal Bank of Scotland (RBS) has been fined £5.6m by the banking regulator, after incorrectly reporting more than 44m transactions made with other banks and non-retail financial services firms.
The Financial Conduct Authority (FCA) said the offences took place between November 2007 and February 2013, and that the erroneous deals represented 37% of all RBS transactions in that period. It added that the fine also covers 804,000 transactions that the bank completely failed to report.
However, a spokesperson for the FCA added, “This is not activity that is relevant to retail consumers directly, and to the best of our knowledge, absolutely no consumers have been affected at all.
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“It’s very separate from the kind of problems RBS has had with its systems around cash machines, for example.”
Transactions in wholesale markets involve complex financial instruments with other banks and non-retail financial organisations. This is not the same as the retail market, which directly affects customers.
Banks must abide by certain rules across Europe when making these kind of deals, but RBS made mistakes in its reporting and even failed to report altogether in some cases.
The FCA spokesperson said it had fined nine other banks in the past for making similar mistakes, including Barclays and Credit Suisse. They added that the transaction reports help it in its “surveillance of the market”.
The FCA’s sister organisation the Prudential Regulation Authority (PRA) said in June that RBS needed to raise £13.6 billion in capital to cover its risks.
The bank was criticised by campaigners in February after it released its annual report, which said it had made a £5.17 billion pre-tax loss in 2012, but at the same time handed out £607m in employee bonuses.
Further reading:
Big five’s banking monopoly at risk, with 2.4m closing accounts in 2012
Small is beautiful: why alternative banks need to step up to the mark
Campaigners angry at size of RBS bonus pot after bank records £5.17bn loss for 2012