TLDR: The Bank of England has fined HSBC £57mn due to shortcomings in the bank’s systems and controls related to the protection of customer deposits. The bank has also been required to take action to address these shortcomings and implement an improved framework for protecting customer deposits. The bank’s failings were identified through a review by the Prudential Regulation Authority (PRA) of HSBC’s compliance with the Deposit Protection Scheme Regulations. The PRA found that the bank had not allocated sufficient resources to ensure compliance with the regulations and had failed to adequately monitor and report on its processes. This is the eighth fine issued by the Bank of England in relation to deposit protection failings since the financial crisis in 2008. HSBC has accepted the findings of the PRA and has committed to taking the necessary actions to address the issues identified.
Key points:
The Bank of England has fined HSBC £57mn due to shortcomings in the bank’s systems and controls related to the protection of customer deposits. The bank has also been required to take action to address these shortcomings and implement an improved framework for protecting customer deposits. The bank’s failings were identified through a review by the Prudential Regulation Authority (PRA) of HSBC’s compliance with the Deposit Protection Scheme Regulations. The PRA found that the bank had not allocated sufficient resources to ensure compliance with the regulations and had failed to adequately monitor and report on its processes.
The PRA review identified a number of specific failings on the part of HSBC. These included a failure to properly allocate resources to ensure compliance with the regulations, a lack of adequate monitoring and reporting on its processes, and a failure to obtain independent verification of its compliance with the regulations. The PRA also noted that HSBC had failed to adequately train and educate its staff on the requirements of the regulations. Additionally, the bank did not have appropriate systems and controls in place to identify and address compliance issues.
This is the eighth fine issued by the Bank of England in relation to deposit protection failings since the financial crisis in 2008. The fines issued to date total over £320mn. HSBC has accepted the findings of the PRA and has committed to taking the necessary actions to address the issues identified. The bank has also agreed to pay the fine imposed by the Bank of England.
