European Central Bank Banking Supervision has imposed an administrative penalty of EUR 6.2 million on BofA Securities Europe SA for intentionally breaching market risk reporting requirements by wrongly calculating and reporting risk-weighted assets for market risk. Between 2022 and 2024, across six consecutive reporting periods, the bank reported market risk risk-weighted assets that were lower than required after including sovereign bond option positions under the internal models approach, despite being aware these positions were not covered by its supervisory permission. The misreporting led to an understatement of risk-weighted assets, which serve as the basis for calculating capital requirements, and resulted in the bank reporting a higher Common Equity Tier 1 ratio than it should have. The ECB applied its Guide to the method of setting administrative pecuniary penalties and classified the breach as severe. BofA Securities Europe SA has the right to challenge the decision before the Court of Justice of the European Union.
European Central Bank - Banking Supervision 2026-03-27
European Central Bank imposes EUR 6.2 million penalty on BofA Securities Europe SA for intentional market risk reporting breach
The European Central Bank Banking Supervision fined BofA Securities Europe SA EUR 6.2 million for intentionally misreporting market risk-weighted assets over six reporting periods from 2022 to 2024. The bank incorrectly included sovereign bond option positions, understating risk-weighted assets and inflating the Common Equity Tier 1 ratio. The breach was classified as severe, and BofA Securities Europe SA may challenge the decision at the Court of Justice of the European Union.