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Standard Chartered hit with £46m fine for misleading regulator

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Standard Chartered hit with a £46m fine: Lender ‘misreported its liquidity position and failed to be open and cooperative’, declares regulator


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’.

It was the biggest fine the PRA has ever levied in a case where it was the only watchdog involved.

The Prudential Regulation Authority, which is overseen by the Bank of England, said Standard Chartered repeatedly misreported its liquidity position and failed to be 'open and cooperative'

The Prudential Regulation Authority, which is overseen by the Bank of England, said Standard Chartered repeatedly misreported its liquidity position and failed to be ‘open and cooperative’

The fine follows a spate of penalties levied against banks including HSBC and NatWest in recent weeks.

The PRA said Standard Chartered made five errors in reporting an important liquidity measurement that was a key indicator of its financial health between March 2018 and May 2019.

This meant it was difficult to tell how secure its finances were.

At one point, the bank failed to notify the PRA of an error until after it concluded a four-month internal probe.

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. City watchdog the Financial Conduct Authority led both investigations.

HSBC was found to have had a catalogue of failings in its anti-money laundering systems that may have led to terrorist financiers, fraudsters and modern-day slavers going undetected for eight years. 

Humiliation: Standard Chartered's chief executive Bill Winters was in charge at the time of the mistakes

Humiliation: Standard Chartered’s chief executive Bill Winters was in charge at the time of the mistakes

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. 

It was concerned about the amount of dollars that had left the lender the previous year and wanted to make sure the bank had a significant buffer in case more were withdrawn.

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’.

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