The European Central Bank has sanctioned the state savings bank Spuerkeess for several reporting failures.
The ECB levied a €1.685m fine on Spuerkeess for failing to meet “own funds” requirements, the minimum amount of capital that banks must legally hold, from March 2018 to March 2023.
The bank did not correctly calculate “a foreign exchange risk stemming from an investment asset held for a long time by Spuerkeess, denominated in US dollars,” it stated in a press release. It also failed to “take into account the indirect impact of a stake in the calculation of capital requirements”.
Spuerkeess “misreport[ed] calculated risk-weighted assets for market and credit risk,” the ECB . “Underestimating risk-weighted assets means the bank did not calculate its capital requirements properly and reported higher capital ratios than it should have. This prevents the ECB from obtaining a comprehensive view of the bank’s risk profile. Capital ratios are key indicators of a bank’s capital strength and its ability to absorb losses.”
“When deciding on the level of penalties, the ECB applies its public guide. In this case, the ECB has classified the breaches as ‘moderately severe’,” it stated.
Some of the errors were discovered during internal checks carried out by Spuerkeess in February 2022, a bank spokesperson told Paperjam on Friday. Others were identified following ECB onsite inspections of the bank “in late 2022 to early 2023”.
Client deposits and the stability of the bank were “never in danger,” the spokesperson stressed.
“The bank’s prudential ratios, after correcting these errors, remained at all times at levels well above the regulatory minimums required by supervisory authorities”, its press release stated. Spuerkeess stated that the credit rating agencies Moody’s and Standard & Poor’s had maintained the bank’s ratings.
The bank stated that it had revamped internal procedures to avoid future calculation errors.
The ECB directly regulates Spuerkeess as the bank is considered a systemically important institution. The fine was issued on 27 September and announced on 15 November 2024.