Scotiabank has been fined €600,000 by the Central Bank for failing to provide accurate information on its liquidity.

A lack of adequate controls and checks to verify the liquidity return process were among five breaches identified by the Central Bank.

The Central Bank also noted that Scotiabank failed to provide accurate information in liquidity reporting returns from the 28th September 2007 to 27th June 2008 and from the 4th December 2009 to 5th March 2010, and therefore did not comply with liquidity ratios in 14 returns.

In 2008 the firm notified the Central Bank that its calculations of the quantitative liquidity ratios were incorrect.

Allowable discounted liquid assets were overstated by US$300 million, the calculation of cash flows did not include all interest inflows and outflows for Interest Rate Swaps on the basis of contractual terms, and the calculation of cash flows did not include all cash inflows and outflows relating to certain other derivative and related transactions.

In April 2010 the firm notified the Central Bank that an automated programme error had been discovered in 12 of the firm’s weekly liquidity returns between December 2009 and March 2010.

These errors resulted in an understatement of cash outflows of approximately US$106 million.

Reprimanding Scotiabank, the Central Bank said it had taken into account the breaches were not deliberate, that the firm reported the failures to the Central Bank and that remedial steps had been taken by the firm to rectify the contraventions.