A British bank could face a further £3bn fine over a series of bank-linked breaches, as part of a wider investigation by the Serious Fraud Office.
The watchdog’s probe found that at least two bank branches across the UK had been linked to criminal activity.
It said that while some branches were operating at “superior” standards, “many branches were in breach of the Bank Act and the Code of Conduct for Banking Supervision”.
At least four of the branches were “systemically unauthorised” to act on customer accounts.
The inquiry’s report, which is due to be released on Friday, said that “there is a need for further action to ensure that banks are operating in a manner which minimises risk to the financial stability of the UK”.
“This investigation has uncovered numerous examples of poor supervision and compliance with the Bank Acts and the Bank Code of Practice for Banking Supervisor,” the report said.
“It is clear that there is a continuing lack of understanding of the regulations that govern the banking industry and the risks that arise from them.”
The findings of this investigation indicate that it is vital that there are robust checks and balances in place to prevent any future failings of this magnitude.
“There is also a need to strengthen the monitoring of compliance with Bank Act regulations.”
Barclays said it “stands firmly” by its actions.
“The bank has taken appropriate remedial action to improve its compliance, particularly in respect of the accounts of customers,” it said.
The bank said it was also working with regulators to identify and address any concerns it may have identified.
“We have made a number of changes to our procedures to ensure we have the right level of supervision and we have implemented our existing code of conduct, which provides that supervisors have to be supervised by an experienced and experienced-minded supervisor,” it added.
Barclays added that it “will work with regulators and the regulator of each of the bank’s branches and to the regulator for each of its branches” to implement its code of practice and safeguard customer information.
Bank of Scotland is the latest UK bank to face a regulatory inquiry over the conduct of its traders.
Last month, Barclays faced a separate probe into the conduct and integrity of its trading activities after it admitted to misleading clients in its 2015 annual report.
Barclays and RBS, which has faced the same scrutiny in the past, both said they were taking “all appropriate steps” to improve their operations.
HSBC also said it would “fully cooperate” with the SFO’s probe.
The investigation follows a series in the UK of breaches by some banks of the regulatory requirements of the financial services industry.
Last year, Barclays paid $1.8 billion in fines to settle an investigation into the bank over alleged fraud.
In May, RBS paid $2.3 billion in penalties and compensation to settle allegations of fraud.
The latest breach of a regulatory scheme has prompted warnings from regulators about the risks to financial stability posed by the lack of effective regulation of financial institutions.
In March, the Solicitor General’s office warned of the need for “robust supervision of the banking sector”.
“Regulators must be able to identify, monitor and investigate banking practices which pose a risk to consumers and the wider economy,” it warned.
“If they do not, then the risks of widespread financial instability will be compounded.”