HSBC finds itself at the centre of financial scrutiny as the Bank of England imposes a hefty £57.4 million fine, marking the second-highest penalty ever issued by the regulator.
The Bank’s Prudential Regulation Authority (PRA) uncovered “serious failings” spanning seven years, from 2015 to 2022, about HSBC’s lapses in accurately identifying deposits eligible for protection under Britain’s Financial Services Compensation Scheme (FSCS).
This scheme ensures customer deposits up to £85,000 are safeguarded, but HSBC’s missteps had significant implications, with 99% of eligible beneficiary deposits incorrectly marked as “ineligible” for FSCS protection.
The gravity of the situation prompted the PRA’s chief executive, Sam Woods, to emphasize that HSBC had fallen “far short of its obligations” and failed to disclose its failings promptly, striking at the core of the PRA’s safety and soundness objective.
