UK banks may face another £40 billion in fines for misconduct, Bank of England warns
Nick Goodway, 02 December 2015
British banks may see their bill for past misconduct rise by another £40 billion, the Bank of England has warned.
The figure, which was included in the central bank’s stress test results on Tuesday, is virtually double what banks have already set aside to cover the cost of historic crimes and misdemeanours.
The Bank explained that while the extra £40 billion was “not a central projection for future misconduct costs”, it had been arrived at using the best available information.
It said: “Bank staff have generated these ‘stressed’ estimates for additional misconduct costs drawing on information provided by participating banks as well as other sources – including, for example, public reports of legal proceedings involving potential bank misconduct issues.”
The stress test assumed that £30 billion of the extra misconduct charges would fall in the first two years of the five-year scenario played out in the simulation.
