HSBC's depositor protection slipped through lack of clear ownership

The bank's "very serious" failure to apply the robust accountability of the Senior Managers and Certification Regime was exacerbated when, in its 2018 ring-fencing exercise, experts on the Depositor Protection Rules were all transferred to a new corporate entity. Denis O'Connor analyses the grounds for the PRA's second-biggest fine.

Denis O'Connoris a fellow of both the Institute of Chartered Accountants in England & Wales and the Chartered Institute of Securities and Investment. He was a member of the British Bankers' Association Money Laundering Committee from 2003-10 and a member of the Joint Money Laundering Steering Group's board and editorial panel between 2010 and 2016. He has been a frequent speaker at industry conferences on financial crime issues, both in the United Kingdom and abroad.

The Prudential Regulation Authority has fined HSBC Bank plc (HSEU) and HSBC Bank UK plc (HSUK) £57.4 million for depositor protection failings between 2015 and 2022 when the banks breached the Depositor Protection Rules (DPR). [1] The DPR requires banks to identify those deposits that are eligible and those that may potentially be eligible for Financial Services Compensation Scheme (FSCS) protection. The sanction also included an element due to HSBC not being open and cooperative with the regulator when it failed to inform the PRA, for 15 months, that it had not been correctly identifying eligible and potentially eligible deposits.