Watchdog fines RBS £5.6m for breach of reporting rules

WATCHDOGS hammered taxpayerowned RBS with a £5.6 million fine yesterday after the bank failed to properly declare millions of wholesale money market transactions.

The Financial Conduct Authority found the Edinburgh-based institution had failed in its duty to correctly report 44.8 million deals made between November 2007 and February this year.

It also said RBS had failed to declare any details of a further 804,000 transactions carried out during the period.

The FCA said failures had occurred in 37% of all wholesale money market deals — covering assets such as shares, government bonds and derivatives — made by the bank during the five years in question.

It said RBS had not only breached financial reporting rules but had also failed to ensure adequate management and controls were in place.

The regulator said many of the problems with the bank’s systems were compounded by the ill-fated takeover of ABN Amro in October 2007, a disastrous move that put RBS on the brink of collapse and forced the Government to step in with a £45 billion bailout package.

However, the FCA said RBS should have had the capacity to overcome the challenges it faced given the considerable resources at its disposal.

The latest censure, which was reduced by 30% from £8m because RBS agreed to settle at an early stage in the FCA’s investigation, follows a £390m fine imposed by UK and US authorities on the bank in February following its role in the Libor inter-bank lending scandal.

The bank was also back in the headlines last month following a political backlash against Chancellor George Osborne over the decision by chief executive Stephen Hester to step down.

The regulator yesterday said that its aim was to ensure markets functioned well — and added that accurate and complete transaction reporting, along with external monitoring, was vital to ensure that objective was properly achieved.

It said the latest failures— a total of seven firms have now been fined for breaching reporting rules, including Barclays and Credit Suisse — were particularly concerning as firms had been advised on how to correctly submit and check reports.

Tracey McDermott, the FCA’s director of enforcement and financial crime, said: “Effective market surveillance depends on accurate and timely reporting of transactions.

“We have set out clear guidance on transaction reporting, backed up by extensive market monitoring, and we expect firms to get it right.

“As well as a financial penalty, firms can expect to incur the cost of resubmitting historically incorrect reports.

“We will continue to take appropriate action against any firm that fails to meet our requirements.”

RBS yesterday said major investment had been made to ensure the situation was not repeated in future.

“RBS fully cooperated with the regulator throughout the investigation,” the bank said.

“We regret the failings that were uncovered and have subsequently made significant investments to our systems and controls in this area.”

The summer heatwave has done nothing to slow down soaring profits at easyJet. Revenues rose 10.5% to £1.14 billion in the three months to the end of June, with passenger numbers increasing 2.6% to 16.4 million. CEO Carolyn McCall expects pre-tax...

Much to reflect on: RBS was fined £5.6m after breaching financial reporting rules and failing to ensure adequate management and controls were in place.