Banks that fail to disclose dangers to their survival could face a fine under a new initiative led by the European Union (EU), according to a Bloomberg report.
The EU is looking to give national regulators the power to impose these tougher penalties as a way to safeguard the region’s financial markets.
Under the EU draft proposal, in the worst cases, banks would be fined at least 10% of their annual sales for the worst cases of misleading regulators regarding levels of capital reserves, liquidity, indebtedness and risk taking, Bloomberg reported.
Bankers may also be fined at least 10% of their yearly pay or €5 million ($7.1 million) for the most serious breaches.
“Effective, proportionate and dissuasive sanctioning regimes are key to ensuring compliance with EU banking rules, protect users of banking services and ensure safety, stability and integrity of banking markets,” said the draft legislation prepared by the European Commission that was cited in the Bloomberg report.