ECB: money laundering prevention requires unified European regulations
In order to successfully combat money laundering in Eurozone, it is necessary to introduce unified European regulations and found a joint institution that would supervise the situation, said European Central Bank Supervisory Board chairperson Danièle Nouy, commenting on this year’s money laundering scandals involving ABLV Bank in Latvia and Danske Bank in Estonia.
She said money laundering prevention is hard work, and it requires effective legislation. There is a directive in place to regulate this field in Europe. This also means there are risks for it to be adopted in 19 different ways in Eurozone. She believes money laundering prevention requires unified European regulations, not a directive. Currently European Central Bank directly monitors Eurozone’s largest banks. However, money laundering prevention is in the hands of every separate member state’s regulatory services.
«I am convinced my colleagues do everything they can. But for countries that are relatively smaller than the rest of Eurozone and which have smaller supervisory institutions it is card to secure a sufficient number of employees with appropriate knowledge and experience to work on this matter. The situation becomes even more critical by the fact that geopolitical risks in this region – Baltic and Scandinavian regions – are not insignificant,» says Nouy.
This is why she believes it would be best to have an institution that would play a supervisory role similar to that of ECB.
«This would allow us to work on money laundering prevention and make relevant decisions from Europe’s perspective, which would be more effective. I have spoken to European legislators, and I am convinced this will happen in the future, because together with harmonized legislative regulations it will serve as an effective solution to problems observed in different countries. But when this happened, development of a new directive was already close to conclusion. This is why it was a bit too late to transform the directive into a regulation,» admits ECB Supervisory Board chairperson. She also admits that banks used for money laundering schemes are hardtop identify, because usually they are well capitalized, have no non-profitable venture business deals, and have good liquidity. ‘If everything was assessed by machines, not people, those banks would get the best possible score. This is why it is such a complex matter for supervisory institutions,’ admits Nouy.
ECB performs a unified bank monitoring mechanism. Its main objective is ensuring security of Europe’s banking system and its sustainability, as well as ensuring financial integrity and stability in Europe.
On 12 July, ECB revoked ABLV Bank’s license. This bank was previously under ECB supervision.