Copenhagen
Denmark’s financial supervisor plans to hold board members of Danske Bank A/S personally accountable if the lender is again caught misleading authorities.
“Their heads are on the block,” Jesper Berg, director general of the Financial Supervisory Authority, said as his office resumes an investigation into Denmark’s biggest bank.
Danske has admitted that a tiny Estonian unit may have been used to launder a “large” part of about $234 billion between 2007-15. Criminal investigations into the bank are under way in Denmark and Estonia, and US and UK authorities are looking at the case. CEO Thomas Borgen has resigned and Chairman Ole Andersen says that several employees have been reported to the police.
Andersen said he also considered resigning because of the laundering scandal, but that he decided to stay on, for now, to deal with the “task” at hand. The remarks, made in connection with Danske’s internal report on the laundering case, show the extent to which some of the titans of Denmark’s financial establishment have had their reputations tainted by the scandal.
Berg is under pressure to show that regulators are on top of the Danske case. The agency opened an inquiry last year, but only after Danish newspaper “Berlingske” reported the suspicious flows at Danske’s Estonian unit. That inquiry, concluded in May, found that Danske had repeatedly misled both Danish and Estonian authorities, and resulted in an $800 million capital penalty.
Berg says the agency will go through the material gathered by Danske’s attorneys over the coming months and compare it to evidence the FSA has, to determine whether new disciplinary measures should be taken against the bank. The FSA in May demanded that all members of Danske’s supervisory and executive boards “sign off” on the information provided to the agency.
Berg said that should serve as an incentive to ensure all future communication with the agency is timely, thorough and accurate. If not, “then we have to rely on the huge consequences it has if the information isn’t sufficiently diligently delivered to us.”
The scandal has prompted Danish legislators to come up with tougher laws, including raising the cap on bank fines by 700 per cent. Across Europe, lawmakers are waking up to the dangers of money laundering in their own backyard and trying to figure out how to improve the region’s defence. Danske is just the latest in a string of recent financial crime cases that has included Deutsche Bank AG and ING Groep NV.
