Financial crime dominates Danish concerns

COPENHAGEN: Danske Bank A/S’ laundering scandal and a massive dividend-tax fraud now look set to influence elections due to be held in Denmark next year.

The country’s politicians are promising major changes to how the financial industry will be policed. The goal: to appease voters stunned by the sheer scale of allegations against their country’s biggest bank, and by revelations that state coffers were systematically robbed by bankers who found a loophole in tax laws.

Mette Frederiksen, the leader of the opposition Social Democrats who most polls indicate will become Denmark’s next prime minister, said financial crime now dominated the list of Danish voter concerns, accord- ing to state broadcaster DR.

The current prime minister, Lars Lokke Rasmussen, has characterised the Danske Bank scandal as a stain on the whole country’s reputation.

Frederiksen said politicians in Denmark needed to respond to voter outrage, or risk undermining confidence in the institutions that underpin a well-functioning society.

The “fear” is that Danes would “lose confidence” in those institutions, she told DR.

The financial crisis of 2008 and its ruinous economic fallout are widely thought to have laid the foundations for the populist backlash that has since gripped many parts of the globe.

Morten Oestergaard, the head of Denmark’s opposition Social Liberals, said the risk in his country is that voters would feel the same sort of disillusionment that has driven populist movements elsewhere unless politicians act decisively.

Frederiksen wants the financial regulator to focus on fighting white-collar crime. The task of tracking standard regulatory matters like capital adequacy should be handed over to the central bank, she told DR.

Frederiksen’s plan follows a proposal by Business Minister Rasmus Jarlov to revamp the financial regulator to give it more powers. He’s already shepherded a bill through parliament that, among other things, raises fines for money laundering by 700%.