The Federal Reserve has directed the US division of Spanish lender Banco Santander to thoroughly reshape its business operations.
The move comes after the US unit failed the Fed’s Comprehensive Capital Analysis and Review for the second year in a row.
Regulators have detected deficiencies in how the holding company manages its capital, its daily funding needs and corporate governance, as well as has faulted risk management at the bank’s US consumer-lending subsidiary.
The bank has also been faulted for failures in liquidity risk management, which shows that it may not have satisfactory programs for projecting future cash flows.
The Fed has not yet imposed any penalty on the bank but has reserved the right to do so later, calling for the bank to write a series of remedial plans.
The regulator has now ordered Santander to come up with a written plan for address the issues within 60 days, then file additional reports on its progress within 30 days of the end of each quarter.