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ECB hands Irish lender first fine as bank supervisor

[FRANKFURT AM MAIN] The European Central Bank said Monday it had fined Irish lender Permanent TSB over breaches of liquidity requirements, the first such decision since the institution took over supervisory responsibilities in 2014.

Retail bank Permanent TSB (PTSB) failed to meet targets for the amount of cash it should have had on hand during two periods in 2015 and 2016, prompting the ECB to impose fines totalling 2.5 million euros (S$4.05 million) on July 13 this year.

PTSB's infraction related to the short-term liquidity ratio, a yardstick regulators use to judge a bank's ability to weather an acute crisis.

Nevertheless, "this breach did not change the liquidity position of Permanent TSB... and the bank has fully remediated the issue," the ECB said in a statement.

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The Single Supervisory Mechanism (SSM) branch of the ECB has since 2014 been the top banking regulator in the 19-nation euro single currency area.

It is the first time the supervisor has used its powers to impose a fine.

PTSB said in a statement it had "self-identified" the breaches to supervisors after they "arose through a misinterpretation of a revised regulation."

A spokesman added that it does not plan to contest the fine in at the European Court of Justice.

Since the breaches, the group's liquidity buffer had grown from 4.0 billion euros to 6.5 billion, PTSB said.

The bank went through a restructuring and received cash from the Irish government in the wake of the 2008 financial crisis.

It was among some 25 banks from across the eurozone that failed ECB stress tests in October 2014.

AFP