Priya PatelTLDR
– HSBC has been fined £57.4 million ($72.8 million) by UK regulators for failing to adequately protect customer deposits in the event of the bank collapsing.
– The violations occurred between 2015 and 2022 and included a failure to accurately identify deposits eligible for protection under a UK program that guarantees bank deposits for individuals up to £85,000 ($107,800).
– The fine is the second-largest ever imposed by the agency, behind only the £87 million ($110.4 million) fine against Credit Suisse last year.
– HSBC cooperated with the investigation and agreed to settle the case, avoiding a higher fine of £96.5 million ($122.4 million).
– The bank said it was “pleased” to resolve the matter.
UK regulators have fined HSBC £57.4 million ($72.8 million) for not adequately protecting customer deposits in the event that the bank collapsed, according to the Prudential Regulation Authority (PRA), which is part of the Bank of England. Two units of HSBC violated rules that are designed to ensure regulators have the necessary information to protect depositors in the event of a bank failure. The violations occurred between 2015 and 2022 and included a failure to accurately identify deposits eligible for protection under a UK program that guarantees bank deposits for individuals up to £85,000 ($107,800). The PRA stated that the failings were “serious” and “go to the heart” of its objective to ensure the safety and soundness of banks. Sam Woods, the chief executive of the PRA, stated that it is vital for all banks to fully comply with requirements around preparedness for resolution.
HSBC cooperated with the investigation and agreed to settle the case, leading to a reduced fine. Without cooperation, the fine would have been £96.5 million ($122.4 million). In response, HSBC expressed its satisfaction with the resolution of the matter. The regulator’s fine on HSBC is the second-largest ever imposed by the agency, with the largest being the £87 million ($110.4 million) fine imposed on Credit Suisse in July 2023 following the near-collapse of the Swiss bank.
