Fed Terminates Enforcement Action Against BNY Mellon Collateral
The Federal Reserve terminated an enforcement action against Bank of New York Mellon Corp. enacted last year after the world’s largest custody bank misstated collateral pledged to a government lending program.
The action, which included a $6 million fine, was terminated effective Oct. 16, the central bank said in a statement issued today in Washington.
Some collateral the bank pledged to the Federal Reserve Bank of Boston in 2008 was ineligible for the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, a program set up to help ease the credit squeeze during the financial crisis, the Fed said in an April 2012 statement. As a result, BNY Mellon received more in loans than it should have, the Fed said.
As part of a “consent cease and desist order,” the bank agreed to submit a plan to the Fed to improve its procedures and to step up employee training, the Fed said last year.
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