The EUs banking watchdog is set to probe the actions of Denmark and Estonias national supervisors to see how they failed to pick up on Danske Banks massive money laundering scandal — and if their actions broke EU laws.
An internal report by Danske Bank last week revealed that “non-resident” clients had funneled around €200 billion through its Estonian branch between 2007 to 2015. Much of that cash was “suspicious,” the report said.
The revelation triggered a response from the Commissions Justice chief Vĕra Jourová, who sent a letter — obtained by POLITICO — to the European Banking Authoritys chairman, Andrea Enria, demanding he investigate the two national watchdogs.
“The Commission … calls on the European Banking Authority to make full use of the power to investigate this possible breach or non-application of Union law both by the Estonian as well as the Danish supervisors,” Jourová wrote. “I would appreciate if you treat the matter with the necessary degree of urgency.”
This is the second time in three months that Jourová has requested the EBA to probe the actions of national dirty money watchdogs. The Czech commissioner made a similar request when U.S. authorities charged the chairman of Maltas Pilatus Bank with money laundering and bank fraud.
The EBA found the Maltese financial regulator, FIAU, had breached EU law in relation to its supervision of Pilatus.
Jourová said in her letter that she fears similar shortfalls occurred in the Danske Bank case.
“The actions of the Danish supervisor … remain unclear and raise questions as to whether the Danish supervisor carried out effective supervision of the Danske Bank group,” she wrote.