A record fine of £37.5 million has been issued to Barclays bank by the Financial Conduct Authority (FCA) for putting £16.5 billion of client assets at unnecessary risk, in the event that the bank had become insolvent.
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The investigation into Barclays had previously revealed that the bank’s internal systems were not robust enough to provide adequate protection for their clients’ money. Investigations have centred on the bank’s investment arm between 2007 and January 2012 – causing a 7% decline in overall profits.
The FCA have also stated that the bank had subsequently ignored a range of industry warnings as well as failing to apply previous enforcement measures brought against them by the FDA’s predecessor, the Financial Services Authority.
FCA director of enforcement Tracey McDermott said, “All firms should be clear after Lehman that there is no excuse for failing to safeguard client assets.”
Barclays was previously fined £1.1 million for similar matters three years ago by the FSA. The bank was then under Antony Jenkins, who subsequently resigned.
The financial authority have argued that by placing clients’ money at an unsafe position, the customer was at risk of incurring extra penalties, lengthy delays or losing their assets if the bank faltered.
In a statement regarding the record FCA fine, the bank said, “Barclays identified and self-reported to the FCA the issues giving rise to the FCA’s findings and we accept their conclusion.
“Barclays has subsequently enhanced its systems to resolve these issues and to ensure we have the requisite processes in place. No client has suffered any loss as a consequence of this weakness in our processes which existed prior to January 2012.”
Photo source: Elliott Brown via Flickr
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