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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