Regulator: Nordic Banks Embroiled In AML Scandals Should Stay

Money Laundering

The head of the Financial Supervisory Authority (FSA) in Finland has warned that Nordic banks involved in money laundering scandals should be measured in their response and not withdraw from the area, according to a report by Bloomberg.

A number of Nordic banks have been implicated in the scandals, including Danske Bank, Swedbank and Nordea Bank Abp.

“This money laundering discussion is very close to panic, and that is very dangerous,” said Anneli Tuominen, director general of the FSA in Helsinki.

Danske has a $230 billion scandal through its Estonian branch, and it’s retreating from the entire Baltic region, including Russia. Nordea is partially pulling out and Sweden’s banks might go as well, although Swedbank has said it’s not going anywhere and that it’s committed to the region.

“It would be the worst possible end result of this discussion if banks would suddenly start to withdraw money from certain markets,” Tuominen said. If there’s a lesson, she continued, it’s to “learn and do better,” not to leave.

Nordic banks are the bedrock of the Baltic financial system, and during the economic crisis in 2009, Swedish krona and banks were the ones that got hurt the most. Lenders in the region stayed and weathered the storm, and then were rewarded when the economy bounced back.

Now, all three Baltic countries are members of the eurozone, but because they’re so close to Russia, some analysts think they’re a first place of entry for criminals who want to launder money and get capital to the West.

Tuominen said she wants the European Union to facilitate creation of a watchdog organization that would oversee banks.

“We need an independent EU-wide supervisory anti-money laundering authority,” she said.

The AML body should be fiercely independent and operate “at an arm’s length” from countries and other authorities, she said.

She said it’s time that banks start seriously being compliant.

“As we have seen, if you don’t do that, your share price falls, you get fired, your bank loses its license,” she said. “There’s no way out of it, you need to be able to block this criminal use of the banking system.”


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.