US orders Royal Bank of Scotland to boost oversight

July 28, 2011 | 08:45

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The US Federal Reserve on Wednesday ordered the Royal Bank of Scotland to beef up its risk management and anti-money laundering monitoring.

In a "cease and desist" order, the US central bank said RBS had to improve oversight of its US operations, including its bank secrecy management, in compliance with US banking regulation.

The Fed gave RBS 60 days to submit a plan to US regulators "to strengthen board and senior management oversight of the corporate governance, management, risk management, and operations" in its US units.

It also has 60 days to demonstrate it will undertake timely reporting of "all known or suspected violations of law or suspicious transactions to law enforcement and supervisory authorities."

In a statement RBS, owned 83 per cent by the British government after a bailout amid the global financial crisis, said it had agreed to the Fed's order.

"We set and expect higher standards than those that resulted in this order," said Stephen Hester, the bank's chief executive.

"RBS is well advanced in addressing the deficiencies noted by the US banking authorities and in continuing to upgrade our governance and compliance systems throughout the Group."

AFP

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