Left Menu
Development News Edition

UPDATE 3-Money laundering could affect financial stability, Danish central bank warns

A money laundering scandal at Danske Bank involving billions of euros of suspicious flows is serious enough to potentially affect the country's financial stability, the central bank warned on Friday.

Denmark's state prosecutor filed preliminary charges on Wednesday against Danske Bank, Denmark's largest lender with a balance sheet 1-1/2 times Danish gross domestic product, for alleged violations of the country's anti-money laundering act in relation to its Estonian branch.

In a report published on Friday the central bank said money laundering issues at a single bank could spread to the entire financial sector.

"It's a question of trust, if there is a spillover effect to the rest of the sector. We haven't seen that yet, but that is the concern," Karsten Biltoft, assistant governor and head of financial stability, told Reuters.

Danske Bank in September disclosed payments totalling 200 billion euros ($227 billion) through its Estonian branch, many of which the bank said were suspicious. It is being investigated by authorities in Denmark, Estonia and the United States and could face sizeable fines.

The bank said it had taken action to tackle the issue.

"We agree completely that it is crucial for the confidence in us as banks that we do everything we can to combat economic crime and money laundering," a Danske Bank spokesman said in an email.

"Therefore we have over the recent years invested significantly in IT systems and in educating our staff, and the number of employees in this area has been quadrupled," he added.


Biltoft said it is unlikely Danske Bank would be met by the same severe sanctions as those which led to the collapse of Latvian bank ABLV.

"We have of course looked at it and thought about it," Biltoft said. "It is very unlikely, but if it did happen it would be quite terrible. If you imagine that Denmark's largest bank would close, that would be really bad, to put it nicely."

ABLV liquidated itself in June after being accused by the U.S. Treasury Department's Financial Crimes Enforcement Network of money laundering, violating sanctions on North Korea and using bribery to influence Latvian officials.

Danske has said the involvement of U.S. authorities in inquiries into alleged money laundering is very different to the case of ABLV.

The central bank's report on financial stability said there was a need for coordinated efforts between firms and authorities to combat money laundering, calling for better European cooperation.

"Money laundering is a cross-border problem, which demands cross-border solutions. And at a European level the Banking Union is such a solution," Biltoft said.

Prime Minister Lars Lokke Rasmussen has said the Danske Bank case has increased the chances of Denmark joining the European Banking Union, set up to ensure banks are better supervised. A decision on the matter is due in 2019. ($1 = 0.8792 euros) (Reporting by Teis Jensen and Jacob Gronholt-Pedersen Editing by Adrian Croft and David Holmes)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)



Hyderabad Encounter: Time to review modern judiciary and restore people’s confidence

Its probably for the first time in the history of independent India, the parliamentarians, chief ministers and ministers in the Union and State governments are openly supporting an encounter. This indicates the people from top to bottom hav...

What happens to your outstanding loans if the bank falls?

... ...

Time for a change! Innovations to stop the growing plastic pollution

As the planet is drowning in plastic pollution, many new innovative approaches and solutions have emerged to effectively deal with the menace....

How to avoid fake universities and fishing bait like Farmington

As education sharks are roaming around to prey, we present a guide on how to mitigate hunters and reach to a genuine universityinstitute. In this era of commercialization of education, the fake universities and economic frauds in educationa...


Latest News

Capitals edge Ducks after squandering lead

Jakub Vrana scored the game-winning goal and also had an assist and Braden Holtby made 27 saves to lead the visiting Washington Capitals to their sixth straight victory, 3-2, over the Anaheim Ducks on Friday night. Evgeny Kuznetsov and Trav...

UPDATE 2-Indian rape victim dies in hospital after being set ablaze

A 23-year-old rape victim set on fire by a gang of men, which included her alleged rapist, has died in a New Delhi hospital, the doctor treating her said on Saturday. The woman was on her way to board a train in Unnao district of northern U...

Robinson, Warriors hang on to beat Bulls

Glenn Robinson III scored a team-high 20 points, including a go-ahead basket with 103 left in the fourth quarter, and the Golden State Warriors held on for a 100-98 win over the host Chicago Bulls on Friday night. Alec Burks scored 14 point...

Tribal girl raped by headmistress' husband at Odisha

A class VII student of a state-run residential school in Odishas Koraput district was allegedly raped for months by the headmistress husband, who has been arrested after the tribal girl was found to be three-month pregnant, police said on S...

Give Feedback