By Daniel Hunter

The Bank of New York (BNY)'s London branch has been fined £126 million for failing to protect its customers' assets.

It is the eighth largest fine ever handed out by City regulator, the Financial Conduct Authority (FCA).

Rules were introduced to ring-fence customers' assets if a bank were to collapse - they came after Lehman Brothers struggled to sort out what money belonged to which people.

The FCA said BNY mixed-up customers' shares, bonds and investments and would have found it difficult to return their assets.

"The firms' failure to comply with our rules was particularly serious given the systemically important nature of the firms, and the fact that safeguarding assets is core to their business," said Georgina Philippou,acting director of enforcement and market oversight at the FCA.

BNY said it regretted its failures and insisted that it has now improved its policies.

A spokesperson said: "We have taken clear steps to put in place a framework of new and improved policies and operational procedures, as well as enhance our specialist resources."