Mind the gap: Bank of England warns banks over data deficiencies

·1-min read
FILE PHOTO: A general view shows The Bank of England in the City of London financial district in London

By Huw Jones

LONDON (Reuters) - Some banks and building societies are failing to supply reliable data for regulators to spot threats to the financial system, the Bank of England said on Friday.

Financial firms must report a range of data on assets, capital and operations to the Bank for checks on any buildup of destabilising risks.

A report into the near failure of The Co-Operative Bank recommended in 2019 that the BoE should go further and consider more formal, third-party reviews of key capital information from banking groups in their data returns.

The BoE said on Friday it had commissioned a "number of reports" from "skilled" or independent persons - paid for by the firms being scrutinised - as part of a broad thematic review of systems and controls on data reporting.

"Overall, we were disappointed to find significant deficiencies in a number of firms' processes used to deliver accurate and reliable regulatory returns," the BoE said in a letter to CEOs of banks and building societies.

"It was clear that multiple firms did not treat the preparation of their regulatory returns with the same care and diligence that they apply to financial reporting shared with the market and counterparties."

The BoE said it found cases of too little investment in reporting, with some firms having outdated systems that needed "significant manual intervention" to fill gaps.

Improvement plans will be scrutinised to see whether they are appropriately resourced or else banks face enforcement action, it said.

(Reporting by Huw Jones, Editing by Timothy Heritage)

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