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.

It also noted Scotiabank’s failure to provide accurate information in liquidity reporting returns from September 28th, 2007 to June 27th, 2008, and from December 4th, 2009, to March 5th, 2010, and therefore did not comply with liquidity ratios in 14 returns.

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

Allowable discounted liquid assets were overstated by $300 million (€206 million), the calculation of cash flows did not include all interest inflows and outflows for interest rate swaps on the basis of contractual terms.

Moreover, the calculation of cash flows did not include all cash inflows and outflows relating to certain other derivative and related transactions.

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

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