ECB slaps Goldman Sachs with €6.63mn fine for capital misreporting

May 16, 2023 (MLN): The European Central Bank (ECB) has fined US financial giant Goldman Sachs €6.63 million ($7.2mn) for misreporting its capital needs, as APP reported.

Goldman Sachs Bank Europe was found to have 'breached credit risk reporting rules' in 2019, 2020, and 2021, the ECB said in a statement.

'For eight consecutive quarters, the bank reported lower risk-weighted assets for credit risk than it should have done,' it said.

In particular, Goldman Sachs 'misclassified corporate exposures', the Frankfurt-based institution said.

'Deficiencies in internal controls prevented the bank from detecting this mistake in a timely manner,' it added.

A spokesman for Goldman Sachs said the bank recognized the 'critical importance of our regulatory reporting obligations' and had 'taken all necessary steps to fully remediate this legacy issue'.

'We have closely cooperated with the ECB throughout and are pleased to have resolved matters fully,' the spokesman said.

Capital ratios are key indicators of a bank's strength and ability to absorb losses in the event of market turmoil.

The ECB tightened its supervision of such ratios after the 2008 financial crisis.

It recently said the move had made the European banking sector stronger in the face of fears of contagion over inflation-related struggles facing many US banks.

The ECB classified Goldman Sachs' breach as 'severe', the third of five possible levels.

The ECB, which supervises 115 of the eurozone's largest banks, has imposed some 20 sanctions on private institutions.

In July 2017, it fined the Italian bank Banca Popolare di Vicenza €8.7mn for missing requirements in quarterly and annual reports.

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