https://www.theguardian.com/busines...a-fscs-financial-services-compensation-scheme
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HSBC has been fined £57m by the Bank of England’s financial stability arm for failing to protect customer deposits in the event of a banking collapse.
It is the second-highest fine imposed by the Bank’s Prudential Regulation Authority (PRA) and reflects the seriousness of the failings, the watchdog said. The highest fine was £87m, imposed on Credit Suisse last July.
HSBC failed for many years to properly implement the requirements set out in the depositor protection rules, the PRA said. The failings occurred between 2015 and 2022. The fine was imposed on two UK subsidiaries of HSBC Holdings, which are deemed︀ to have the “capacity to cause significant disruption to the UK financial system if they︁ were to fail”.
The bank failed to accurately identify deposits that were eligible for Financial︂ Services Compensation Scheme (FSCS) protection, which insures deposits if a bank collapses.
HSBC lacked “adequate︃ systems and controls, and governance” necessary to enable FSCS to make prompt payments to depositors︄ in the case of a banking collapse, the PRA said. It added that the failings︅ had “materially undermined the firm’s readiness for resolution”.
The PRA said the bank failed to︆ alert the regulator about problems identified in the incorrect marking of accounts as eligible for︇ FSCS protection over 15 months.
HSBC also breached other rules that state that lenders must︈ prepare for resolution with a minimum disruption of critical services in the event of a︉ banking collapse.
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If HSBC can get it wrong what hope is there︊ for smaller UK banks 🙁
---- quote start
HSBC has been fined £57m by the Bank of England’s financial stability arm for failing to protect customer deposits in the event of a banking collapse.
It is the second-highest fine imposed by the Bank’s Prudential Regulation Authority (PRA) and reflects the seriousness of the failings, the watchdog said. The highest fine was £87m, imposed on Credit Suisse last July.
HSBC failed for many years to properly implement the requirements set out in the depositor protection rules, the PRA said. The failings occurred between 2015 and 2022. The fine was imposed on two UK subsidiaries of HSBC Holdings, which are deemed︀ to have the “capacity to cause significant disruption to the UK financial system if they︁ were to fail”.
The bank failed to accurately identify deposits that were eligible for Financial︂ Services Compensation Scheme (FSCS) protection, which insures deposits if a bank collapses.
HSBC lacked “adequate︃ systems and controls, and governance” necessary to enable FSCS to make prompt payments to depositors︄ in the case of a banking collapse, the PRA said. It added that the failings︅ had “materially undermined the firm’s readiness for resolution”.
The PRA said the bank failed to︆ alert the regulator about problems identified in the incorrect marking of accounts as eligible for︇ FSCS protection over 15 months.
HSBC also breached other rules that state that lenders must︈ prepare for resolution with a minimum disruption of critical services in the event of a︉ banking collapse.
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If HSBC can get it wrong what hope is there︊ for smaller UK banks 🙁
