Financial Supervisory Authority issues public warning to Eufex Bank Plc
The Financial Supervisory Authority (FIN-FSA) has issued a public warning to Eufex Bank Plc for omissions concerning, among other things, the requirements laid down in the Credit Institutions Act for internal control and risk management, and several related regulations issued by FIN-FSA.
The omissions related to the bank's operations were detected during an inspection of internal governance in spring 2012 and in connection with the supervisory review, drawn up at the end of 2012, which evaluates the group's main risks and risk-bearing capacity.
The quality of the bank's capital planning could not be assessed, as the bank lacked timely, written principles and procedures to identify, measure and mitigate risks to capital adequacy. As regards large exposures, the bank had significantly exceeded the maximum exposures and had failed to report on them. Shortcomings in internal control had led to a situation where the bank's board and senior management could not obtain a fair view of the bank's financial position.
A bank must have internal governance that enables effective risk management and, vis-à-vis its operations, adequate internal control and risk management systems. A bank's board must appropriately ensure that capital adequacy, risk management and internal control functions, as well as the related reporting, monitoring and responsibility relationships, are at levels required for banking.
The administrative sanctions available to FIN-FSA in the present case are public reprimand and public warning. FIN-FSA considers that, as a whole, the bank's procedures have been reproachable to such an extent that a public warning is a sanction proportionate to the violations and omissions committed.
A public warning does not have legal force. The bank may appeal the decision of 25 July 2013 to the Market Court within 30 days of receipt of notice of the decision.
For further information, please contact
- Erkki Kontkanen, Chief Advisor, tel. +358 10 831 5260
- Decision by the Financial Supervisory Authority (in Finnish, pdf)