Some banks and building societies are not providing enough reliable information for regulators to properly identify threats to the financial system, the Bank of England (BoE) wrote in a letter to CEOs published yesterday.
Financial firms are required to report data on areas including assets, capital and operations to the BoE who use the information to conduct health checks and spot risks.
The Bank said it commissioned “a number of reports from skilled persons” to assess systems and controls on data reporting.
But it was scathing in its criticism of banks. “We were disappointed to find significant deficiencies in a number of firms’ processes used to deliver accurate and reliable regulatory returns,” wrote the bank in the letter signed by executive directors David Bailey and Rebecca Jackson.
“It was clear,” the letter continued, “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. For some firms, there had been a historic lack of focus, prioritisation, and investment in this area.”
The Bank said it would follow up with some firms on specific findings and continue reviews to check that banks improve their regulatory reporting.