The Centre for Banking Research (CBR) has launched a report which aims to promote transparency in financial activity, benchmarking the level of conduct costs, and conduct risk as an analytical tool for banks and their stakeholders.
The report draws on data collected from 20 of the world’s largest banks between January 2008 and December 2018.
Key findings from the latest report include information that the 20 banks have paid conduct costs in excess of £377bn during the data collection period.
This includes everything from fines, judgments, and settlements against the bank, to disgorgement of profits, costs of repurchasing securities at par, and private actions that relate to misconduct.
In addition, US banks incurred £202.5bn (approximately 55%) of these costs. UK banks paid £86.09bn, more than twice that of Euro Area banks (£41.31 bn) and Swiss banks (£40.19 bn).
Nearly 60% of the £377bn total was attributed to regulatory directed redress, with banks spending to repair previous discretions or better comply with regulations.
Barbara Casu, director of the CBR said: “Banks are at the forefront of the global economy and society, so it is important that they engage positively in ethical and legal practice”.
She added: “The conduct costs project seeks to use historical data to reveal industry shortcomings and provides a framework for good practice across the banking sector. We are delighted to reveal our latest insights and look forward to developing further datasets.
“Our main focus in the near future will be on European banks, and we hope this acts as a blueprint for helping banks reduce costs, improve transparency, and inspire greater stakeholder confidence.”