FRANKFURT The European Central Bank said on Monday it had fined Goldman Sachs' European unit 6.63 million euros ($7.3 million) for underreporting the risk associated with some corporate credit, thereby flattering its balance sheet.

The ECB, the euro zone's top banking supervisor, said Goldman Sachs Bank Europe misclassified some corporate exposures for eight straight quarters in 2019-21, assigning a lower risk to them than the rules prescribe.

Goldman Sachs did not immediately respond to a request for comment. It can challenge the ECB’s decision before the Court of Justice of the European Union.

"Deficiencies in internal controls prevented the bank from detecting this mistake in a timely manner," the ECB said.

"The bank reported wrongly calculated figures to the ECB, therefore preventing the ECB from having a comprehensive view of its risk profile," it added in a statement.

So called risk weights determine how much capital a bank needs to cover the risk associated with an asset.

By attaching lower risk weights to some assets, Goldman Sachs Bank Europe "reported higher capital ratios than it should have done", the ECB said.

It classified the breach as "severe", the third most serious category out of five.

($1 = 0.9084 euros)

(Reporting by Francesco Canepa and Alexander Smith)