UK banks facing another £40bn in fines?
The mess created by the banks of Britain doesn't seem like it is going to be tidied away any time soon, as the Bank of England has warned them that they could well be looking at another £40bn in fines and compensation bills, thanks to their historic crimes and transgressions.
This follows the results of its stress tests, which all seven of Britain’s systemically important banks passed, but only after some of them took action to build up their contingency funds. We're looking at you RBS.
If these forecasts from the BoE come true, then the figure for these penalties would ensure that the amount put aside for misconduct costs would be doubled.
The Bank noted that, while the extra £40bn was “not a central projection for future misconduct costs”, they had come up with the figure by using the best available information. They said: "Bank staff have generated these ‘stressed’ estimates for additional misconduct costs drawing on information provided by participating banks as well as other sources – including, for example, public reports of legal proceedings involving potential bank misconduct issues."
Basically, it could be more than that, because the Bank can't anticipate issues that have not been identified yet, or indeed, there might be bad things done in the banks' past which haven't come to light yet, so therefore, this figure "cannot be considered a worst-case scenario."