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Bank to Pay $3 Million for Improper Regulatory Accounting of Risk-Weighted Assets

The Bank of New York Mellon Corporation agreed to a settlement with the Board of Governors of the Federal Reserve System ("FRB") in response to deficiencies in its capital treatment of certain assets.

The FRB alleged that the Bank of New York Mellon Corporation ("BNY Mellon") consolidated a portfolio of collateralized loan obligations on its balance sheet and incorrectly assigned a zero-risk weighting to the assets in its risk-based capital ratios. As a result, between 2010 and 2014, FRB alleged that BNY Mellon understated its risk-weighted assets and overstated its risk-based capital ratios, in violation of Regulation Y.

In a Consent Order, BNY Mellon agreed to pay a $3 million fine.

Primary Sources

  1. FRB Press Release: "Federal Reserve Board Announces $3 Million Fine against Bank of New York Mellon Corporation (BNY Mellon) for Unsafe and Unsound Practices" (June 27, 2017)
  2. FRB / BNY Mellon: Consent Order of Assessment of a Civil Money Penalty against BNY Mellon

Tags

Regulated Activities
Capital Regulatory Reporting Accounting and Audit M&A and Corporate Form Transactions
Sub-Activity
Regulation Y (FRB)
Regulated Entities
Banking Entities
Regulated Products
ABS
Body of Law
Banking Law
Jurisdiction
US - Federal
Organization
US Banking Regulators
Sub-Author
Federal Reserve Board