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.
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