EU banking watchdog to probe Denmark and Estonia over Danske Bank scandal

EU banking watchdog to probe Denmark and Estonia over Danske Bank scandal
By bne IntelliNews September 25, 2018

The European Banking Authority (EBA), the EU’s banking sector watchdog, plans to probe the Danish and Estonian banking supervision authorities over the Danske Bank scandal, Politico Europe reported on September 24.

Danske Bank said last week that non-resident customers put an estimated €200bn of payments – many of them suspicious – through the bank’s Estonian branch in 2007-2015. 

The bank admitted that “a series of major deficiencies in the bank's governance and control systems made it possible to use Danske Bank’s branch in Estonia for suspicious transactions.”

The Danske Bank case highlights lax control over money flows in Estonia and is an embarrassment for the authorities of the Eurozone, of which Estonia has been a member since 2011.

In the aftermath of the case, the European Commission asked the EBA 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,” the Justice Commissioner Vera Jourova wrote in a letter to the EBA, Politico Europe reported. 

“I would appreciate if you treat the matter with the necessary degree of urgency,” she added.

The Danske Bank scandal is pushing the EU authorities to tighten control of money flows in the bloc. The Commission is pushing for the EBA to lead efforts before a specialist agency is created.

Related Articles

New report alleges Danske Bank’s Estonian branch handled up to €26bn of Russian money in one year

Danske Bank’s Estonian branch could have handled up to $30bn (€26bn) of non-resident money, mostly from Russia and other former Soviet republics, in 2013, a new report probing the dealings of the ... more

Vilnius promoted with saucy “G-spot” ad campaign ahead of papal visit

Advance viewings of a suggestive new advertising campaign for the Lithuanian capital have sparked a row between the city authorities and the local Catholic Church. Adverts proclaiming ... more

Drought wreaks havoc on Lithuanian farmers as state declares nationwide emergency

The Lithuanian government declared a nationwide state of emergency on July 4 because of drought that is expected to hit this year’s crops severely. Vilnius will seek to ensure Lithuanian farmers ... more