The Importance of Accurate RWA Calculations: Banque et Caisse D’Epargne Fined
In its latest press release, the ECB announced that Banque et Caisse d’Epargne de l’Etat has received two administrative fines (total of €1.685 million) for misreporting calculated risk-weighted assets related to market and credit risk.
The fines were imposed because the bank understated its risk-weighted assets in two ways:
It failed to correctly account for its USD-denominated positions when calculating the capital needed for foreign exchange risk.
It did not include an indirect equity position when calculating its exposure to qualifying holdings outside the financial sector.
Risk-weighted assets are a bank's assets adjusted for their risk level, as not all assets carry the same amount of risk. Misrepresenting the risk level can lead to the bank reporting higher capital ratios than it actually has.
See press release here.
Read more:
Sovereign wealth funds (SWFs) are gaining significant traction around the globe, emerging as powerful tools for governments to manage their financial reserves and invest for the future. Among these funds, the Public Investment Fund (PIF) of Saudi Arabia stands out as a crucial catalyst propelling the nation towards a new era of economic diversification and growth.