Bank Regulation

European Regulators Warn Of Weaknesses In Money Laundering Controls

European Regulators have issued a warning about what they are calling serious weaknesses in how the EU controls money laundering in the wake of scandals.

According to a report in the Financial Times citing a confidential paper prepared by the EU financial supervisors, the supervisors said recent events — including a money laundering scandal involving Danske Bank and other lenders — “exposed shortcomings” and “gaps” in how national and EU authorities work together to stop money laundering. The report, which is culled from the findings of the regulators from the ECB, the European Banking Authority and European Commission, concluded that banking regulators across the EU could do more to fight money laundering. The report found there were shortcomings with co-operation and information level. That was both domestically and across borders with other European Union member states, noted the report.

Andrea Enria, chair of the EBA, told the Financial Times he supports a new pan-European body to ensure banks do background checks and take other measures to fight money laundering. “If you are in the single market, the strength of anti-money laundering controls can only be as high as the weakest link. So if you have a weak authority, then the criminal money may enter the single market,” said Enria in the report.

The Financial Times noted that the report was sent to the governments and the European Parliment. Other weaknesses highlighted in the report include a lack of clarity on how the financial supervisors are to work together, information sharing arrangements that aren’t cohesive and a lack of necessary resources for the EU to ensure rules are being enforced. The paper also found that the EBA, which is in charge of EU banking regulations, has 1.8 full-time employees working on money laundering issues.  Some of the suggestions to improve the situation include create a memorandum of understanding on data sharing and creating an EU-level “mechanism” that better coordinates the work of national supervisors.


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.