04 Dec 2019
Europe’s finance chiefs are to confront a wave of money-laundering scandals within the banking industry by recommending that a regional agency be formed to prevent such crimes.
Officials will call on the European Commission, the EU’s executive arm, to further consider and make a proposal for setting up a common institution to fight illicit financial flows, according to a draft document seen by Bloomberg. They’re set to agree on the recommendations Thursday in Brussels.
The current framework’s shortcomings have been laid bare by a string of high-profile scandals that have shut down banks and slashed lenders’ share prices in several European countries. A coordinated response by the region’s finance ministers would open the door for a revamp of the system’s supervision, which is vulnerable to abuse because it’s largely legislated along national lines.
Sweden’s SEB AB last month became the latest lender under scrutiny after acknowledging that more than $90 billion in transactions were made at its Estonian operations by non-residents, with roughly a third at “increased risk for money laundering.” That followed scandals over the past two years including at Danske Bank A/S, Nordea Bank Abp and ING Groep NV.
While an accord would reflect widespread recognition on the need for reform, there are still many questions on what exactly needs to be done, according to two officials involved in the talks who asked not to be identified because the discussions aren’t public. Thorny issues include areas like law enforcement, which are traditionally handled at the national level, they said.
The commission should “explore in particular the possibilities, advantages and disadvantages of conferring certain responsibilities and powers for anti-money laundering supervision to a Union body with an independent structure and direct powers,” according to the document.
By Alexander Weber, Bloomberg, 2 December 2019
Read more at Bloomberg
RiskScreen: Eliminating Financial Crime with Smart Technology
You can claim CPD minutes for this content, by signing up to our CPD WalletFREE CPD Wallet