Wall Street lenders face reporting probes by UK banking watchdog
A number of Wall Street’s biggest banks are facing investigations from the UK’s banking regulator regarding concerns of widespread financial reporting failures.
The Prudential Regulation Authority (PRA) is commissioning reports on the quality of data being supplied to it by companies including Goldman Sachs and Morgan Stanley, according to Sky News.
The UK operations of Bank of America Merrill Lynch and Canadian lender Scotiabank are also expected to be subject to the Section 166 reports, City sources told Sky News.
Read more: Oil prices surge after US assassinate General Qassem Soleimani but Wall Street stocks stutter
It comes just weeks after Citi was handed a record £44m fine by the PRA for inadequate internal controls and governance arrangements relating to regulatory reporting obligations.
Citi would have been fined £62.7m had it not settled, the regulator said in November. The penalty reflected the lender’s consistent overstating of capital and liquidity coverage over a four-and-a-half year period.
The PRA, which lies within the Bank of England, is concerned other banks have committed similar offences.
Sources told Sky News this weekend that the Section 166 reports would be conducted by a number of the larger accountancy firms, although it is not clear which, if any, have yet been appointed.
The commissioning of inquiries does not mean the banks will be found guilty of being negligent in their filings.
The PRA warned in October it would “consider the full range of supervisory responses” if it had concerns about the quality of their financial reporting.
It is not clear which other banks could also be subject to this investigation.
The PRA, Goldman Sachs and Morgan Stanley have so far declined to comment.