(Berlin) The European Central Bank has imposed a severe fine of 6.63 million euros ($9.7 million) on the American bank Goldman Sachs for having underestimated its capital needs between 2019 and 2021, a-t she announced on Monday.
The American financial giant has been sanctioned for having “breached credit risk reporting rules”, the ECB said in a press release.
“In 2019, 2020 and 2021, for eight consecutive quarters, the bank declared credit risk-weighted assets lower than they should have been”, adds the monetary institution.
The latter observes that the bank “misclassified the exposures of the companies”, applying to them a risk weighting lower than that prescribed by the banking rules, and that “deficiencies in the internal controls prevented this error from being detected in due time”. .
Goldman Sachs said in a statement that it recognized “the crucial importance of (its) regulatory reporting obligations”, ensuring that it had “taken all necessary measures to fully remedy this problem”.
“We have cooperated closely with the ECB throughout the process and are pleased to have fully resolved the issues,” a Goldman Sachs spokesperson said in an email to AFP.
An understatement of risk-weighted assets means that the bank has not correctly calculated its capital requirements.
Capital ratios are key indicators of a bank’s strength and its ability to absorb losses in the event of market turbulence, as required since the 2008 financial crisis and the tightening of supervision the ECB that followed.
These rules have made the European banking sector more solid, the ECB recently recalled on the occasion of fears of contamination caused by the difficulties of several American banks.
The ECB has classified Goldman Sachs’ breach in the “serious” category, the third level of a scale of seriousness comprising five.
The ECB, sole supervisor of some 115 largest banks in the euro zone, has already imposed around twenty sanctions against private establishments.
The heaviest fine was imposed in July 2017 on the Italian bank Banca Popolare di Vicenza for an amount of 8.7 million euros ($12.7 million).