FSA censures Kaupthing Singer & Friedlander

The Financial Services Authority (FSA) has publicly censured Kaupthing Singer and Friedlander Limited (KSFL) for failures in the assessment and reporting of its liquidity position in 2008.

The failures occurred between occurred between 29 September 2008 and 2 October 2008, when the bank did not give proper consideration to or properly monitor a special financing arrangement with its parent company in Iceland under which it could draw up to £1bn at short notice if necessary. It was subsequently put into administration on 8 October 2008. The FSA said KSFL had assumed it could rely on receiving a £1bn ‘Liquidity Transformation Arrangement', if needed, without testing that assumption. In addition, when it started to have concerns about this liquidity arrangement, it fail...