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Deutsche Banking Risk Management

Deutsche Bank has been fined 150 million dollars for not trying to prevent Mr Epstein sending money to his coconspirators and Russian models.

Deutsche Bank allowed Epstein to make payments to women without adequate checks.

20th April 2020 British Banks Told By Bank Of England BoE To Open The Money Supply Taps To UK Businesses

The BoE Prudential Regulation Authority PRA reports that British based banks should use their capital and liquidity headroom to support the UK economy though the coronavirus pandemic.

The banks currently have substantial liquidity buffers including cash and short term bonds. In normal economic times they are obliged to maintain capital and liquidity to protect themselves from rainy days. Its raining but if banks do not help businesses out it could turn stormy and even develop into a hurricane.

Banks are expected to use their liquidity buffers in doing so even if it means liquidity coverage ratios LCR go significantly below 100 percent

PRA guidance to UK lenders

Banks are charged with lending up to 330 billion pounds to businesses but so far have only lent a small fraction of that amount under a government scheme to support companies struggling in the pandemic.

Banks will not face sanctions that would follow a breach of capital and liquidity thresholds set by the PRA in normal times.

Bank of England PRA

The PRA said it would also give lenders sufficient time after the crisis to replenish their liquidity and capital buffers.

31st March 2020 Systemic Banking Industry Collapse Rises As Coronavirus Pandemic Will Take A While To Burn Out

Governments around the world have failed to react quickly enough to contain the spread of the virus through their population. As a result the economic measures required to protect the national banking system need to be greater to control the economic impact of the virus.

How unstable was the banking system in the likes of Italy and India. China was not exactly immune but the coronavirus pandemic risk management control measures adopted by China have worked relatively quickly. However Italy and India were slow to react and now the humanitarian pain and economic pain threatens national banking systems. The threat to their banking systems threatens the global banking system.

2oth March 2020 Bank of England BoE Scrapping Annual Stress Tests For UK Lenders This Year

The BoE wants banks and building societies to focus on supporting consumers and businesses during the coronavirus outbreak with continued provision of credit.

18th March 2020 Anecdotal Evidence From Business Leaders That UK Commercial Banks Are Presently Trying To Charge Interest On Loans To Businesses Ranging From 8 Percent to 18.9 Percent When It Should Be 0 Percent Under Recently Announced £330 Billion Coronavirus Package

UK commercial retail banks and the UK government need to align the lending policy and practice by beginning of next week at latest to reduce the risk of businesses going bust before the cheap money is made available to keep them afloat.

14th March 2020 UK Banks Asked Bank of England To Scrap 2020 Stress Test of Lenders and To Soften Rules To Help Them Cope With Expected Losses From Coronavirus Pandemic

Senior bankers talking to Reuters News Agency have expressed their concern about impact of coronavirus on UK banks and have asked Bank Of England to be more flexible.

The Bank of Englands Financial Policy Committee monitors risks in the financial system and publishes findings at end of 2020. However UK banks will be fighting off effects of the worst financial crisis since 2008 financial crisis throughout 2020.

The BoE declined to comment on the stress test. The Treasury said it was a matter for the BoE. The BoE has repeatedly said the British banking sector is holding enough capital.

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11th March 2020 UK Will Fully Implement Globally Agreed Bank Capital Rules That Were Response To Financial Crisis In 2008

Basel capital rules were introduced financial regulators around the world to prevent a recurrence of the 2008 financial crisis..

31st January 2020 Lloyds Bank Issued Guidelines To Branch Managers On Treating Staff Fairly 

Lloyds senior management team have issued the guidelines after a rise in complaints to Accord union about working conditions across the branch network.

Examples of staff complaints included demands to work in their own time asking junior staff to open and close branches and long distance commutes resulting from staff switching to new branches after their local one closed.

Given the advance of fintech technology and banking businesses with no branch network it is likely that Lloyds will close many more branches over the coming years if they are to compete with new competition.

29th January 2020 Banks Paid Out More Than 36 billion dollars In Fines Since 2008 Financial Crisis According To Fenergo

Swiss banks were the worst offenders in 2019 with 5 billion dollars in fines and damages handed to UBS for helping French clients evade tax authorities.

HSBC were fined nearly 2 billion dollars for being used to launder money between a Mexican and Colombian drug cartel.

2019 was another record year for fines the second biggest in history and 2020 is shaping up to be a very busy year in this space

Laura Glynn Global Compliance and Regulatory Director of Fenergo

11th December 2019 Small UK Banks Call For Banking Regulations For Smaller Banks To Be Eased To Increase Competition In Banking Industry

26th November 2019 Bank Leader Quits Over Money Laundering Scandal

26th November 2019 Citi Bank Fined 44 million pounds by Prudential Regulation Authority PRA For Financial Health Reporting Errors

The Prudential Regulation Authority PRA fined Citi bank European operations for serious and widespread failing in the way reports were made to PRA..

Citi banks UK regulatory reporting framework was not designed implemented or operating effectively and Citi bank failed to submit complete accurate regulatory returns to the PRA.

The failings related to legally required reports on capital and liquidity. Banks are legally required to provide regular updates on these measures and must maintain minimum standards to ensure they can survive should any financial shocks occur.

Citi banks failure relates to the reporting requirement rather than lack of capital or liquidity. However the reporting error would have resulted in 63 million fine had Citi bank not cooperated fully with the PRA.

14th November 2019 When Banking Goes Wrong Bank Customers Need Help From Government or Regulators To Protect and Get Their Money Back

13th November 2019 Competition For Traditional Retail Banks Continues To Escalate

An App only bank in UK has won Best British Bank and Best Current Account 2019. Facebook Amazon and Google are just a few of the big players working in partnership to offer banking services. What are the biggest banks in the UK and the world doing innovatively to continue to grow other than working in partnership with internet business giants to provide back office and regulatory knowledge and experience?

Can the big UK retail banks actually bring a product or service to the marketplace that will not result in massive fines and compensation for mis selling!

Bank competitors are global have pots of cash and are extremely innovative dynamic and successful. Given that Royal Bank of Scotland is struggling to make a small profit more than a decade after the financial crisis it does not bode well for traditional retail banks in UK unless they can at least start to more innovatively than who can we buy like Lloyds Bank and Metro Bank!

22nd October 2019 Banks may need to merge before next financial crisis to protect banking system

Close to 60 percent of the worlds banks are not strong enough to survive another financial crisis.

Click here to discuss the vulnerability of the banking industry to the next financial crisis.

#BankingRisks#FinancialCrisis#BankMergers

9th September 2019 Unlikely That Banking Industry Has Learned From 50 Billion Pound Plus Mistake

UK banking shares slide again today on news that claims for Personal Protection Insurance PPI have been much higher than was anticipated. It is likely that the final compensation bill for PPI misselling will exceed 50 billion pounds.

However the true cost to banks will fastly exceed 50 billion pounds. The destruction in banking shares value has cost banking shareholders dearly in lost captial value and lost dividends that would otherwise have been paid out had compensation to banking customers not needed to have been paid out.

Who could have thought that an insurance policy to protect banking customers who fell on bad times due to ill health or unemployment could have caused so much financial and reputational damage? Well bank managers!

Banking industry risk management should have meant that a valuable insurance protection was brought to the marketplace that helped protect customers and increased profit for banks. Not hard. At least it should not have been hard.

BusinessRiskTV

This suggests that bank managers will once again bring banking products and services to the marketplace that result in massive payouts and reputational damage to banks. In fact this is more than a suggestion. Banks whilst in the middle of handling billions of pounds in compensation claims for PPI customers were and are being punished for a wild variety of poor risk management decisions surrounding new bank products and services.

The people of the UK have the banking industry they deserve. The vast majority of PPI claimants were happy to buy PPI cover to protect them should they fall on hard times. Most would have been able to claim though some shockingly would not for example some self employed. However the vast majority of the 50 billion pounds paid out should not and the vast majority of claimants should not have claimed if they had any moral values. They know they were happy with the protection from hard times but claimed anyway cause they could.

When the banking industry throws up the next financial scandal the people of the UK should remember their actions on PPI claims. They are as bad as bad bank managers.

BusinessRiskTV

The only upside from this banking industry debacle is that more than 50 billion has been paid into the UK economy. Holidays new cars new furniture wild nights out etc have all supported the UK industry since the financial crisis in 2008 which was of course caused by yet another example of poor banking risk management.

The banking industry needs to learn from past mistakes. Trouble is it has not. Light touch banking industry regulation is very dangerous. We need it so that we can release billions of pounds of wasted money stored up to cope with the next financial sector risk management disaster.

Unfortunately that money stockpile is necessary as the financial services industry is incapable of bringing new products and services to the marketplace without creating the base for the next financial crisis.

23rd August 2019 CMA Criticises RBS and Santander Over PPI Processes

The competition watchdog Competition and Markets Authority CMA has instructed Royal Bank of Scotland and Santander to improve their payment protection insurance PPI processes. The CMA says they do not communicate appropriately with their customers.

RBS and Santander PPI process fail to comply with a 2011 order by CMA which required PPI providers to send customers an annual reminder setting out how much was paid for their policy the type of cover they had and their right to cancel.

Both banks have been instructed to appoint an independent auditor to assess their PPI processes.

BusinessRiskTV

Banks can be fined for inappropriate PPI processes and failure to communicate suitably to PPI customers.

The banking industry in the UK will end up paying out some 50 billion pounds in compensation for mis-selling payment protection insurance PPI. An incredible destruction in bank valuations and all because the banking industry failed to manage risk properly.

21st August 2019 Barclays Bank Digital Banking Shutdowns Worst In UK

According to analysis by the BBC bank customers experience more than 10 digital banking shutdowns a month on average.

Barclays reported 33 incidents in the 12 months to the end of June this year

BBC

Digital banking customers with Barclays bank suffered the most outages in the last 12 months.

9th August 2019 Malaysia Charged 17 Former And Current Goldman Sachs Bankers Over Corruption Investigation Into State Development Fund 1MDB

Amongst those charged is Richard Gnodde the most senior banker in London. Goldman Sachs is defending charges. If convicted those charged could face prison sentences of up to 10 years.

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25th December 2018 The Big Short might be a good film to watch at this moment of time

What direction are the financial markets going? Could the debt socked economy be prelude to the next financial crisis. Stock markets around the world are falling. Has the bubble burst? Will it deflate more in 2019?

What do you think? CLICK HERE to share your thoughts

18th December 2018 Santander Fined More Than 30 Million Pounds For Probate Management Failures

The Financial Conduct Authority FCA says Santander failed to transfer funds worth more than £183 million to beneficiaries. In addition Santander did not disclose information about the probate issues to the FCA after it became aware of them. 40428 customers were directly affected.

These failings took too long to be identified and then far too long to be fixed 

Mark Steward executive director of enforcement and market oversight at the FCA

Firms must be able to identify and respond to problems more quickly especially when they are causing harm to customers.

Santander banks probate and bereavement processes had a limited ability to identify all the funds it held of a dead customers estate and suffered from failings to follow up with representatives of the dead customer which increased the likelihood of the cases not being closed

There was also ineffective monitoring of open cases to determine if they should be closed. This means a dead customers case would remain incomplete and funds would not be transferred to those who were entitled to them.

Furthermore some funds belonging to dead customers would not be identified and transferred to those who were entitled to it. These people would have been unaware the funds existed.

17th December 2018 Goldman Sachs Charged In Malaysia

Malaysias attorney general has filed criminal charges against Goldman Sachs related to the theft of billions of dollars from the countrys development fund.

Charges were bought against Goldman Sachs investment bank and its former employees Tim Leissner and Roger Ng. Jasmine Loo Ai Swan and Jho Low two former employees of Malaysias sovereign fund 1MDB were also charged.

The charges relate to the long running scandal centring around 1MDB. Authorities around the world have been investigating claims that billions were stolen from 1MDB for several years. Earlier this year former Malaysian prime minister Najib Razak was arrested on anti corruption charges as part of a probe into 1MDB.

Malaysian authorities accused Goldman Sachs of helping to facilitate the stealing of 2.7bn dollars from government backed bond issues that raised 6.5bn dollars. The three bonds were issued by 1MDB a government owned strategic development fund in 2012 and 2013. Goldman Sachs helped arrange the issues.

Malaysias attorney general accused two Goldman employees involved in the deal of conspiring with 1MDB employees to bribe Malaysian public officials in order to procure the selection involvement and participation of Goldman Sachs in these Bond issuances.

Goldman received 600 million dollars for helping to underwrite and arrange the bond issues which the attorney general said was several times higher than the prevailing market rates and industry norms.

14th November 2018 UK Banks Failing To Assess Risks According To FCA Review of Whistleblowing Procedures

According to the regulator the Financial Conduct Authority FCA most banks in Britain are not assessing and escalating whistleblower concerns consistently and some need to improve arrangements to protect those who lift lid on wrongdoing from victimisation.

The FCA says UK banks need to document whistleblowing investigations and should differentiate training programmes for staff managers and internal investigators.

A new All Party Parliamentary Group on Whistleblowing was registered in August 2018 to propose best practice whistleblower legislation to UK parliament to enact

BusinessRiskTV

Banking leaders still need to do more to cultivate and communicating risk management culture so that whistleblowers come forward to identify wrongdoing early. Banking leaders need to do more to assess how whistleblowing arrangements are working in practice.

14th November 2018 Former UK UBS Trader Deported From UK

Former UBS trader Kweku Adoboli who was jailed for causing Swiss Bank more than 2 billion dollars in losses via fraudulent trading is being deported from UK to Ghana.

He had served half of his 7 year sentence for fraud before being released in 2015. As a foreign national given a custodial sentence he was in line for deportation back in 2015 but he lodged several appeals against deportation which all failed. Born in Ghana he left when 4 and came to UK aged 12.

It was alleged that UBS senior managers were fully aware of his activities and encouraged him to take risks to make profits for the bank. However prosecutors argued he exceeded his trading limits failed to hedge trades and faked records to cover his tracks between 2008 and 2011. When he was arrested UBS share price fell 10 percent.

14th November 2018 Banking Whistleblower Compensated By Lloyds Bank

Lloyds Banking Group said it had settled with an ex employee who accused former bosses of concealing a massive fraud at its HBOS Reading unit prior to a record breaking cash call needed to keep the combined group afloat in 2009.

The bank apologised to Sally Masterton a former senior manager at Lloyds and that it had agreed to pay her financial compensation.

1st November 2018 Former Goldman Sachs Bankers Charged

USA Department of Justice have brought criminal charges against two former Goldman Sachs bankers and Malaysian financier Jho Low in connection with Malaysia state development fund 1MDB scandal

One Goldman banker admitted to conspiring to launder money and violate a US anti bribery law

Department of Justice USA

The other banker has been arrested while Mr Low remains at large.

It is alleged that corrupt officials stole billions from the Malaysian state fund. Former Malaysian prime minister Najib Razak has also been charged with corruption.

USA authorities have also filed civil suits aimed at recovering luxury goods cash and other items purchased with money fraudulently extracted from the fund.

Goldman Sachs is cooperating with the investigation into the fraud.

9th October 2018 HSBC Settles Claims For Compensation Selling Mortgage Backed Securities

HSBC has agreed to pay 765 million dollars to settle claims connected to residential mortgage backed securities sold prior to the financial crisis.

HSBC settled the claims for compensation without admitting liability or wrongdoing.

Others have paid to settle claims against them

  • Wells Fargo 2 billion dollars
  • RBS 5 billion dollars
  • JPMorgan Chase 13 billion dollars
  • Bank of America 17 billion dollars

12th July 2018 Two Former Senior Bankers Convicted of Manipulating Euro Interbank Offered Rate Euribor Between 2005 to 2009

Phillipe Moryoussef was a trader with Barclays Bank and Christian Bittar was principal trader at Deutsche Bank.

The Serious Fraud Office SFO says the two convicted traders conspired together to submit false or misleading Euribor submissions to benefit their positions and change the published rate

21st June 2018 TSB Bank May Not Have Tested Its Technology Properly

TSB may not have carried out proper tests before transferring five million customers to a new IT system.

IBMs reported into the PR disaster suggests  TSB Bank may have failed to understand the risks involved or to carry out proper tests. TSB Bank said IBMs report was not a fair reflection of what happened. IBMs report has now been published by MPs on the Treasury Committee.

Consumer group Which? said that TSB had clearly been unprepared for IT changes.

Hundreds of TSB Bank customers to lost money from their accounts as a result of fraud.

MPs on the Treasury Committee have previously called on Paul Pester the chief executive of TSB to resign.

20th June 2018 Ex CEO Anglo Irish Bank Jailed For 6 Years

The former chief executive of Anglo Irish Bank has been jailed for 6 years for inflating the banks balance sheet. David Drumm was convicted of conspiracy to defraud and false accounting. His sentence took into account the 5 months he spent in custody in the USA before being extradited to Ireland to face trial.

5th June 2018 Australia Charges Former Citi Deutsche and ANZ Senior Executives

Australian regulators the Australian Competition and Consumer Commission ACCC charged former local bosses of Citigroup Inc Deutsche Bank with criminal cartel offences over a 2.3 billion dollar stock issue in 2015.

The regulator charged Citis former Australia chairman Stephen Roberts its current local head of capital markets John McLean and its London-based head of foreign exchange trading Itay Tuchman. In addition it charged Deutsches former local chief Michael Ormaechea and former local capital markets head Michael Richardson.

It said charges were also laid against ANZ treasurer Rick Moscati. ANZ Citi and Deutsche are defending charges.

If successfully convicted large fines can be imposed and guilty people face prison terms of up to 10 years. Those charged will appear in court on 3rd July 2018.

4th June 2018 French Banking Giant Agrees Fine

Societe Generale has agreed with USA and French regulators to a settlement on poor banking practices surrounding Libya and on its handling of the ‘IBOR’ money market rates.

Societe Generale agreed to pay a 250 million euro fine to french treasury as part of its settlement linked to Libya. It as accounted for 2.3 billion euros regarding those various probes.

SocGen has already agreed to pay 1 billion euros to settle dispute with the Libyan Investment Authority.

12th April 2018 Should Bank Of England BoE Panels Be Kept Apart

There are calls to merge the monetary and financial policy committees due to roles overlapping. However the BoE Deputy Governor Ben Broadbent thinks this would overload policymakers and raise the risk of the kind of mistakes that helped lead to the financial crisis in 2007-08.

31st March 2018 Barclays To Pay $2 Billion Penalty

Barclays bank has agreed to pay American government $2 billion over the sale of mortgage backed securities which is part of the financial crisis.

The USA justice department has been investigating allegations that Barclays bank caused billions of dollars of losses to investors with an alleged fraudulent scheme.

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