ECB: money laun­der­ing preven­tion re­quires uni­fied Euro­pean reg­u­la­tions

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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.

Ieva Čīka/LETA

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