Danske Bank came under renewed pressure from the Danish government on Friday to show it’s taken adequate steps to ensure it will never again be used as a laundromat for illicit funds.
The latest rebuke comes after a report by police revealed that a far larger sum than originally estimated passed through banks operating in Estonia, where Danske was embroiled in a laundering scandal for which it was reprimanded by the Danish regulator this month.
Referring to Danske Bank, Danish Business Minister Brian Mikkelsen said, “I certainly expect them to get this straight and make the necessary adjustments. And it has to happen very, very quickly in order to re-establish confidence in the entire financial sector.”
The regulator has “made the point that what happened at Danske Bank damaged the entire financial sector,” Mikkelsen said in an interview in Copenhagen on Friday.
Estonian police now estimate that bankers in their country were involved in suspicious transfers of money and securities, mainly from Russia, totalling more than $13bn from 2011 to 2016. Estonian police didn’t single out specific banks, but Denmark’s financial watchdog has already chastised Danske for serious and large-scale laundering violations at its Estonian unit, resulting in additional capital charges and a series of orders for management to meet.
The Danish regulator stopped short of seeking criminal charges against Danske, citing a lack of evidence. The Danske executive in charge of the unit at the time has since left the bank. An internal probe of Danske is ongoing, and the Estonian supervisor is also continuing its investigation. Danish Justice Minister Soren Pape Poulsen has said that police in the Nordic country may yet choose to prosecute should new revelations warrant such a step.
The Danish regulator earlier this month issued an unusually harshly worded report on Danske, castigating Denmark’s largest lender for its failure over the years to stop its Estonian unit from being used to launder significant funds, mostly stemming from Russia. Chief executive officer Thomas Borgen has publicly apologised for the misdeeds, which the Danish government has called “unforgivable.”
Mikkelsen said, “Danske Bank holds a particularly strong responsibility to correct the things that went on.”
The bank says it can’t comment before its internal investigation is completed, which is due to happen later this year.
“I expect and anticipate that they make the necessary adjustments,” Mikkelsen said.
“I can’t judge based on history but I can judge that they need to straighten up now.”
A man exits the Danske Bank headquarters in Copenhagen. The latest government rebuke comes after a report by police revealed that a far larger sum than originally estimated passed through banks operating in Estonia, where Danske was embroiled in a laundering scandal for which it was reprimanded by the Danish regulator this month.
