Global bank fines $321bn since 2008

BANKS globally have paid $321 billion (R4.2 trillion) in fines since 2008 for an abundance of regulatory failings from money laundering to market manipulation and terrorist financing, according to data from Boston Consulting Group (BCG).

That tally is set to increase in the coming years as European and Asian regulators catch up with their more aggressive US peers, who have levied the majority of charges to date, BCG said in its annual study of the industry published yesterday. Banks paid $42bn in fines just in 2016, a 68 percent rise on the previous year, the data showed.

“As conduct-based regulations evolve, fines and penalties, along with related legal and litigation expenses, will remain a cost of doing business,” analysts led by Gerold Grasshoff wrote. “Managing those costs will continue to be a major task for banks.”

The era of ever-increasing regulatory requirements is here to stay, BCG said, despite President Donald Trump’s pledge to roll back the 2010 Dodd-Frank Act that reshaped US banking in the aftermath of the collapse of Lehman Brothers. The number of rule changes that banks must track on a daily basis has tripled since 2011, to an average of 200 revisions a day.

Almost 10 years after the onset of the financial crisis, the banking industry still hasn’t completely recovered from the losses it suffered by one measure, BCG said.