Bank of Montreal Ireland fined €650,000 by Central Bank

Thursday 29 May 2014 17.50
Bank of Montreal Ireland's three contraventions occurred at various periods between 2008 and 2013
Bank of Montreal Ireland's three contraventions occurred at various periods between 2008 and 2013

The Central Bank has fined the Bank of Montreal Ireland a total of €650,000 for breaches of various regulations.

In a statement, the Central Bank said that Bank of Montreal Ireland's three contraventions occurred at various periods between March 2008 and March 2013.

The Bank of Montreal Ireland was found to have had an exposure to a client which breached the permitted limits, while it also failed to properly calculate its exposure with its parent company.

It also did not have effective processes and adequate internal controls in place to ensure compliance with permitted limits.

The Central Bank said it had raised concerns in January 2013 about one of the company's financial exposures contained in a regulatory return. The company had initially told the Central Bank that this exposure was exempt from limits as it was an exposure to an institution and was due to mature in less than a year.

However, the company subsequently accepted that after a change in legislation, this exemption did to apply to it.

Bank of Montreal Ireland's solvency ratio remained at all times in excess of the required capital levels, the Central Bank stressed today. It has also taken the appropriate remedial steps to correct the failures. 

This is the second settlement by the Central Bank with a credit institution in respect of the failure to adhere to large exposure limits. 

"Regulated firms are required to submit regulatory returns to the Central Bank on a regular basis containing information which is used by the Central Bank to determine the financial stability of a firm and to monitor the level of risks to which a firm is subject.  The accuracy and compliance with all regulatory obligations of such regulatory returns is key to the Central Bank’s ability to supervise regulated firms," commented the Central Bank's director of enforcement Derville Rowland.

"Where the Central Bank finds evidence of failures in the areas of regulatory reporting or compliance with regulatory limits the Central Bank will continue to use its range of regulatory tools including enforcement," she added.