English Arabic Armenian Azerbaijani Chinese (Simplified) Chinese (Traditional) Czech Danish Dutch Estonian Filipino Finnish French Galician Georgian German Greek Hindi Hungarian Icelandic Indonesian Italian Japanese Korean Latvian Lithuanian Malay Maltese Norwegian Persian Polish Portuguese Russian Slovak Slovenian Spanish Swedish Thai Turkish Ukrainian Vietnamese

Banking fines - the ethics cost of doing business

LONDON: A new study by the London School of Economics and Political Science (LSE), estimates that 10 of the world's leading banks have incurred self-described "conduct costs" of £148.02 billion since 2008.

LSEThe research, led by LSE professor Roger McCormick, assessed bank misconduct costs between 2008-2012 resulting from, amongst other things, mis-selling payment protection insurance, manipulating LIBOR, and failing to observe anti-money laundering rules.

Top of the list is Bank of America at $54 billion followed by JP Morgan Chase and UBS at $24.65 billion respectively. The seven other banks have estimated liabilities of an additional $44.72 billion.

Commenting on the study professor McCormick said: "This league table allows the public for the first time to view an independent, objective set of figures which relate in one way or another to bank behaviour over the five years ending December 2012 (including provisions as at that time). The banks ranked here are all household names. The fundamental question is: can we expect these costs to start going down soon if these banks now have sound ethical cultures? If not, why not?"

McCormick compares the bank's contingency costs to the £150 billion GDP of Singapore and Greece; the world's 24 richest nations' annual aid budget of £80 billion; and the UK National Health Service budget of £100 billion.

"Banks are required by regulators to 'know your customer' and, in any event, they can't help knowing rather a lot about us simply by virtue of the fact that they know a lot about our finances and what we do with our money. But do we know as much as we should about them? Is it time for more 'know your bank'? Notwithstanding the ongoing scandals, they say they are trying to be more ethical than in the past and determined to 'restore public trust'. How can we test that? Is it just the latest PR message or is there some substance to it?"

The LSE study says that future levels of conduct costs in the European Union will, in part, be determined by the European Commission (EC) cartel settlement procedure. The LSE points out that currently banks can receive full immunity for revealing the existence of cartels. This allowed UBS to avoid a fine of approximately €2.5 billion. Also, under the EC's leniency programme, banks can also be granted a 10 percent discount on their fines by agreeing to a settlement.

2008-2012 (£bn)                          Total Costs      Provisions and Contingent Liabilities    Grand Total
Bank of America                             30.41               23.58                                                       54.00
JP Morgan Chase & Co                    18.52                 6.13                                                       24.65
UBS                                              23.69                 0.95                                                       24.65
Citigroup, Inc                                  8.71                 3.13                                                        11.84
Lloyds Banking Group PLC                5.87                 3.37                                                          9.24
HSBC                                             4.03                 2.22                                                          6.25
Barclays PLC                                   3.06                 2.00                                                          5.06
Royal Bank of Scotland                    1.73                  2.51                                                         4.24
Santander                                      2.70                  1.44                                                         4.14
Goldman Sachs                               1.76                 2.19                                                          3.95
Grand Total (£bn)                    100.48                 47.52                                                       148.02

News

Written on 13/12/2017, 22:14
corruption-pervasive-in-trump-white-houseBERLIN: December 13, 2017. A new survey by ethics watchdog Transparency International says 44 percent of Americans now believe that corruption is...
Written on 13/12/2017, 22:07
banks-to-test-blockchain-for-sustainable-supply-chainsLONDON: December 13, 2017. The University of Cambridge Institute for Sustainability Leadership (CISL), supported by Barclays, BNP Paribas, Sainsbury's,...
Written on 13/12/2017, 21:38
shipt-a-target-for-us-550-millionMINNEAPOLIS: December 13, 2017. American bricks-and-mortar retailer Target Corp. is to purchase Shipt, an online same-day domestic delivery platform, for...
Written on 11/12/2017, 18:20
deutsche-bahn-subsidiary-regrets-rastatt-rail-closureDUSSELDORF: December 11, 2017. Speaking at meeting of rail operators last week, DB Netz CEO Frank Sennhenn expressed regret for his company's involvement...
Written on 10/12/2017, 22:44
rolls-royce-to-test-remote-controlled-shippingPARIS: December 06, 2017. The European Space Agency (ESA) and Rolls-Royce have signed an MoU to investigate how space technology can be used to develop...
Written on 08/12/2017, 20:10
beijing-continues-to-cut-carbonNAIROBI: December 06, 2017. According to an Assessment Report on Beijing Capital Airport, released during the third UN Environment Assembly in Nairobi...
Written on 07/12/2017, 20:53
bollore-begins-rail-renovation-between-cote-d-ivoire-and-burkina-fasoABIDJAN, Côte d'Ivoire: December 04, 2017. SITARAIL, a Bolloré Transport & Logistics subsidiary, has begun upgrading the rail link between Abidjan and...
Written on 07/12/2017, 19:53
innovative-dry-bulk-handling-at-port-of-rigaRIGA, Latvia: December 06, 2017. The Baltic port of Riga says it has become the first in Europe to use containerized dry bulk handling technology. Rīgas...
Written on 06/12/2017, 21:57
azerbaijan-railways-gets-us-400-million-upgradeMANILA: December 06, 2017. The Asian Development Bank (ADB) is providing loans to Azerbaijan Railways totaling US$400 million to improve governance and...
Written on 03/12/2017, 22:36
amsterdam-to-get-china-rail-link-in-2018AMSTERDAM: November 29, 2017. Together with TMA Logistics, Austria's Rail Cargo Group and the Port of Amsterdam, Netherlands-based Nunner Logistics plans...
Written on 01/12/2017, 18:27
alibaba-launches-china-anti-poverty-campaignHANGZHOU: December 01, 2017. Alibaba Group executive chairman Jack Ma has established a US$1.5 billion 'Alibaba Poverty Relief Fund' by leveraging the...
Written on 29/11/2017, 19:46
dhl-adds-tesla-trucks-to-its-electric-fleetBONN: November 29, 2017. DHL Supply Chain has announced an order for 10 Tesla Electric Class 8 Semi tractors for delivery in 2019. The company said it...
Written on 28/11/2017, 21:50
netherlands-rail-operators-threatened-by-high-costsUTRECHT, Netherlands: November 28, 2017. RailGood, a Dutch alliance of 50 rail operators, logistics companies, inland terminals plus the German port of...
Written on 28/11/2017, 19:54
electric-powered-airbus-by-rolls-royce-and-siemensLONDON: November 28, 2017. Airbus, Rolls-Royce and Siemens are to develop and fly an hybrid-electric powered BAe-146 test aircraft by 2020 to determine...
Written on 27/11/2017, 21:04
rail-operators-want-compensation-for-rhine-valley-closureBRUSSELS: November 27, 2017. Three European rail freight associations want DB Netz, a subsidiary of Deutsche Bahn, to pay customers full compensation...
Written on 24/11/2017, 22:56
argentina-gdp-needs-aviation-investment-says-iataBUENOS AIRES: November 20, 2017. A report from Oxford Economics says Argentina could be a "regional powerhouse" if the government invested in the...
Written on 24/11/2017, 21:41
europe-top-in-attracting-business-talentLAUSANNE, Switzerland: November 20, 2017. A new study by the IMD business school says Switzerland, Denmark and Belgium are the best at attracting,...
Written on 21/11/2017, 21:21
singapore-signs-smart-logistics-mou-with-south-koreaSINGAPORE: November 21, 2017. Government enterprise agency IE Singapore has signed an MoU with South Korea's Gyeonggi province to collaborate in...
Written on 17/11/2017, 21:43
decathlon-takes-to-the-railsDOURGES, France: November 16, 2017. Maersk Line and Damco, subsidiaries of A.P. Møller – Mærsk, have completed their first block train from Wuhan, China...
Written on 16/11/2017, 18:06
mia-director-resignsMIAMI: November 14, 2017. Miami-Dade County Aviation Department director and CEO Emilio González, the driving force behind much of Miami International...

- powered by Quickchilli.com -