Money Launderers Could Begin Targeting Smaller Banks, Warns Denmark

By | April 2, 2019

Denmark’s financial watchdog is warning that smaller banks need to be on high alert for signs of money laundering as larger lenders tighten their surveillance systems.

Jesper Berg, director general of the Financial Supervisory Authority in Copenhagen, said Denmark is concentrating on “building the lines of defense and having them stronger,” in an interview with Bloomberg Television’s Tom Keene and Anna Edwards.

Denmark’s biggest bank, Danske Bank A/S, is at the center of what may be Europe’s worst ever money laundering case. Danske said last year that a large chunk of $230 billion in transactions done via an Estonian unit was suspicious. The bank has lost almost half its market value since the revelations surfaced, and the scandal has driven sweeping changes in Denmark, including far greater powers for the FSA.

“What happened in the Danske Bank case was deplorable by any standards,” Berg said. “We are now dealing with it.”

“The steps we have taken now and the Danish government is taking with a broad coalition in parliament will take us far down the road, including building the strongest framework in Europe,” he said.

Completely eliminating money laundering is impossible but regulators and banks can make it difficult, Berg said. He declined to blame Russian President Vladimir Putin for the surge of suspicious money that’s flowed into Europe.

“It is more than the leadership of Russia,” Berg said. The “environment” also plays a large role, and “it is clear, a Scandinavian culture of having trust and confidence clashes with the way business is being done in Russia, and we have lessons to learn.”

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