RBS ordered to improve risk management by Fed

28 July 2011

Risk management processes are among those the Royal Bank of Scotland (RBS) has been ordered to improve in the US by the Federal Reserve (Fed).

According to the Fed, the bank needs to set up more robust risk management and compliance programs in order to adhere to the bank secrecy act and anti-money laundering requirements in place at their US branches.

The bank has up to 60 days to submit a plan to the Fed outlining how it will increase oversight of corporate governance, management and operations in the US.

Operations referred to include those of the Dutch bank ABN Armo, which the group acquired back in 2007.

The banking group said it agreed to the issue of the consent order by the central body.

Stephen Hester, RBS chief executive officer, said: “We set and expect higher standards than those that resulted in this order.

“RBS is well advanced in addressing the deficiencies noted by the US banking authorities and in continuing to upgrade our governance and compliance systems throughout the group.”

By Jim Ottewill

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