BNY Mellon fined $6 million for misstating collateral
17 April 2012 New York
Image: Shutterstock
BNY Mellon was fined $6 million by the Federal Reserve Board for misstating the collateral it pledged to a government lending program in 2008.
A share of the collateral the bank vouchsafed to the Boston Reserve Bank was ineligible for the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, or AMLF, a program set up to help ease the credit squeeze during the financial crisis, the Federal Reserve said.
As a result, BNY Mellon received more in loans than it should have, according to the statement. The bank agreed to submit a plan to the FRB to improve its procedures and to improve training for staff.
“This situation resulted from a failure in our internal reporting and escalation processes related to our use of the program in 2008,” said spokesman Ron Gruendl. “We are pleased to put this matter behind us.”
A share of the collateral the bank vouchsafed to the Boston Reserve Bank was ineligible for the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, or AMLF, a program set up to help ease the credit squeeze during the financial crisis, the Federal Reserve said.
As a result, BNY Mellon received more in loans than it should have, according to the statement. The bank agreed to submit a plan to the FRB to improve its procedures and to improve training for staff.
“This situation resulted from a failure in our internal reporting and escalation processes related to our use of the program in 2008,” said spokesman Ron Gruendl. “We are pleased to put this matter behind us.”
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