Barclays will have to find a spare £72 million for its fine for not conducting proper checks against money laundering and financial crime.
The fine relates to a specific transaction of £1.88 billion in 2012 on behalf of super rich clients who were described as prominent and in public life.
Although no evidence of any crime has been found, nevertheless the Financial Conduct Authority said that Barclays had failed to carry out appropriate checks to establish the purpose of the transaction or to sufficiently corroborate the source of the funds.
In fact, Barclays applied a lower level of oversight than required for other business relationships of a much lower risk.
It was a bad week for Barclays as it was also fined $150 million by US authorities for foreign exchange wrongdoings.
The FCA said that the bank went to "unacceptable lengths" to accommodate the clients". Moreover, it wished to “take on the clients as quickly as possible and thereby generated £52.3 million in revenue".
"Barclays agreed to keep details of the transaction strictly confidential, even within the firm, and agreed to indemnify the clients up to £37.7 million in the event that it failed to comply with these confidentiality restrictions," the FCA said.
It is the largest fine the FCA has ever imposed for failing to comply with financial crime-fighting rules.
It includes the £52.3 million that Barclay's made on the deal, and an additional £19.8 million. The top-up was reduced by 30% as the bank agreed to settle the case quickly.
The bank said: "The FCA made no finding that Barclays facilitated any financial crime in relation to the transaction or the clients on whose behalf it was executed. Barclays has cooperated fully with the FCA throughout and continues to apply significant resources and training to ensure compliance with all legal and regulatory requirements."
Comments
I am interested in Mike Williams view on the scandal at HBOS and Northern Rock. Both of these banks were effectively nationalised because they were collapsing and their directors were not up to the job. And the taxpayer has protected the investors. And yet only one of HBOS senior members has been punished. And the regulator, the Bank of England, has escaped scot free.
Events in the banking sector in Britain are as bad as those in Portugal; but not being in the euro common currency, the British can find their own way out, even if it leads to ever greater public debt. The Portuguese are bound by their relationship with the ECB.
Think now of all those defrauded by the Portuguese banks playing games. Often outright criminal activity - not just stretching the rules. The most prominent being BES. Few of those defrauded there get anything back as Portuguese banks cannot afford it even if they recognised any wrongdoing..