Jack Quann
Jack Quann

13.20 5 Jul 2019


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A subsidiary of US bank Wells Fargo has been fined €5.8m by the Central Bank of Ireland.

Wells Fargo Bank International Unlimited Company (WFBI) was reprimanded for "serious failings" in its regulatory reporting capability and compliance.

The firm admitted five breaches between January 1st 2014 and February 28th 2019.

They include a failure to accurately report the firm's capital position, and to comply with a requirement in relation to liquidity testing.

The Central Bank decided that the appropriate fine was €8.4m - but this was reduced by 30% in accordance with the settlement discount scheme.

An investigation began following an inspection of regulatory reporting in five peer credit institutions in 2016.

It focused on end-to-end processes, internal controls and governance of regulatory reporting.

Wells Fargo A view of the Central Bank of Ireland's Dublin Docklands headquarters | Image: Niall Carson/PA Archive/PA Images

The Central Bank found serious and systemic failings in regulatory reporting capability, relating to a failure to calculate and accurately report the firm's capital position, weak governance arrangements, inadequate internal control mechanisms - including a failure to properly document processes and procedures - and weaknesses in IT systems.

Seána Cunningham is the Central Bank's director of enforcement.

"It is a minimum requirement of being regulated by the Central Bank that firms submit accurate and timely regulatory returns.

"Regulatory returns are a tool used by the Central Bank to monitor the financial position of credit institutions and the risks to which they are exposed.

"The submission of inaccurate information undermines the Central Bank's ability to properly supervise.

"Miscalculation and misreporting of the firm's capital position, in particular, is a fundamental failure.

"A firm understanding its capital position, and the accurate reporting of this in its returns are of paramount importance to understanding its safety and soundness."

"The financial penalty imposed by the Central Bank reflects the widespread systemic failures in this instance, and the importance of regulatory returns as a tool used by the Central Bank to supervise firms."

"Significant improvements"

A Wells Fargo spokesperson told Newstalk.com: "WFBI takes its regulatory obligations seriously and we are committed to complying fully with regulatory requirements.

"These events concerned regulatory reporting and did not affect our customers.

"We have made significant improvements to our systems, processes and resources for regulatory reporting to the Central Bank of Ireland since these events.

"We have also integrated continuous review and improvement into how we operate to ensure that our regulatory reporting to the CBI continues to be complete, timely and accurate."

WFBI is a public unlimited company, authorised by the Central Bank, and is a wholly-owned, indirect subsidiary of Wells Fargo & Company - a US-based multinational banking and financial services holding company.

Audited accounts for the year ending December 2018 show WFBI had a turnover of over US$586m (€520m) and an operating income of more than US$340m (€301m).

This is the second large fine on a US bank here in as many weeks.

In late June, JP Morgan was fined €1.6m by the Central Bank for regulatory breaches relating to the outsourcing of fund administration activities.


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Breaches Central Bank Central Bank Of Ireland Governance Failings Regulatory Breaches Regulatory Reporting Regulatory Reporting Breaches Seána Cunningham WFBI Wells Fargo Wells Fargo Bank International Unlimited Company

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