Central Bank fines Goldman Sachs

THE CENTRAL Bank of Ireland has fined Goldman Sachs €160,000 following an investigation into regulatory breaches at the investment bank.

The Central Bank found that the bank failed to manage, monitor and report accurately its regulatory counterparty risk capital requirement during an 18-month period between July 2008 and December 2010. In addition, the firm’s internal control mechanism failed to identify that its regulatory counterparty risk capital requirement was incorrectly calculated, the investigation found.

Goldman Sachs disclosed errors in calculations of the firm’s counterparty risk requirement to the Central Bank in December 2010.

In a statement yesterday, the Central Bank said that in deciding the appropriate penalty to impose, it had taken account of the fact that the regulatory capital maintained by the firm during the period was at all times in excess of its capital requirements, and that the bank had co-operated with the investigation from an early stage.

Director of enforcement Peter Oakes said the existence of proper systems and controls to ensure continuous and proper calculation of risk and regulatory capital requirements was essential to the maintenance of stable and properly financed financial service providers. The reliance on automated systems should be tempered by adequate oversight to ensure that systems and controls are comprehensive and proportionate.

“Firms are reminded to monitor and test their internal control systems on a regular basis and should take great care to ensure that any changes to systems are properly and fully tested so that regulatory requirements are adhered to and all regulatory reports provided to the Central Bank are accurate,” he said.