Business Irish

Friday 23 March 2018

Citi's Irish unit is fined €550k for reporting errors

The Central Bank on Dame Street
The Central Bank on Dame Street

Peter Flanagan and Charlie Weston

US BANKING giant Citi has been fined by the Central Bank for breaching financial reporting regulations.

The Irish-based division of the world banking group was fined €550,000 for breaking reporting rules on cash flows. In a statement, the regulator said Citibank Europe was in breach of how it managed its liquidity risk.

Citibank Europe identified the problem itself.

Under banking regulations, banks are required to report to the Central Bank the level of assets it has that it can quickly convert into cash if needed. These "liquid assets" must be kept above a minimum level at all times.

In Citi's case, the Central Bank found that the firm:

{HTML_BULLET} Failed to ensure the accuracy of its liquidity reporting to the Central Bank.

{HTML_BULLET} Failed to have "adequate internal controls in place" to ensure the accuracy of its regulatory liquidity.

{HTML_BULLET} Did not apply haircuts to retail and corporate deposits to reflect the perceived risk associated with those holdings.

{HTML_BULLET} Included encumbered assets as part of its portfolio of readily marketable assets reported as liquid assets in returns.

Despite the issues, the Central Bank emphasised Citi remained in compliance with the minimum required liquidity ratios at all times.

This is the fourth fine for liquidity reporting the Central Bank has imposed on different institutions since 2009.

Central Bank director of enforcement Derville Rowland said: "Regulated institutions must have proper and effective systems and controls in place to ensure compliance with their regulatory reporting obligations.

"The pursuit of enforcement actions in respect of the accuracy of information submitted to the Central Bank and systems and controls failings are two of the Central Bank's Enforcement Priorities for 2013 and, for that reason, where breaches occur in these areas, regulated entities and their management should expect vigorous investigation and follow-up by the Central Bank," she added.

The banking giant said it had discovered the breach.

"Citibank Europe plc self-identified the regulatory liquidity reporting errors in 2012 and immediately notified the matter to the Central Bank of Ireland," it said.

"We regret the reporting errors occurred. At no time did Citibank Europe plc breach any liquidity limits and at all times the bank was highly liquid with strong capital ratios. We are pleased that this matter is now resolved."

Irish Independent

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