(Writes through, adds Goldman Sachs not immediately available
for comment)
FRANKFURT, May 15 (Reuters) - The European Central Bank
said on Monday it had fined Goldman Sachs' European unit
6.63 million euros ($7.3 million) for underreporting the risk
associated with some corporate credit, thereby flattering its
balance sheet.
The ECB, the euro zone's top banking supervisor, said
Goldman Sachs Bank Europe misclassified some corporate exposures
for eight straight quarters in 2019-21, assigning a lower risk
to them than the rules prescribe.
Goldman Sachs did not immediately respond to a request for
comment. It can challenge the ECB’s decision before the Court of
Justice of the European Union.
"Deficiencies in internal controls prevented the bank from
detecting this mistake in a timely manner," the ECB said.
"The bank reported wrongly calculated figures to the ECB,
therefore preventing the ECB from having a comprehensive view of
its risk profile," it added in a statement.
So called risk weights determine how much capital a bank
needs to cover the risk associated with an asset.
By attaching lower risk weights to some assets, Goldman
Sachs Bank Europe "reported higher capital ratios than it should
have done", the ECB said.
It classified the breach as "severe", the third most serious
category out of five.
($1 = 0.9084 euros)
(Reporting by Francesco Canepa and Alexander Smith)
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