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Danish financial authority failed to use strongest measures against banks: report

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Danish financial authority failed to use strongest measures against banks: report
File photo: Carl Redhead/Ritzau Scanpix
11:39 CEST+02:00
Banking regulator Finanstilsynet has failed to use the full extent of its powers to control lenders, media in Denmark reported on Thursday.

The Danish Financial Supervisory Authority (Finanstilsynet) has been reticent to intervene with bank leaderships in relation to recommendations provided in international guidelines, Jyllands-Posten reports.

A previously unseen note sent by the agency to parliament last year shows a lack of full application of ‘fit-and-proper' rules relating to bank leaderships, the newspaper writes.

Fit and proper guidelines are designed to help authorities to assess whether a person is considered to be suitable to take charge of a bank.

Money laundering expert Jakob Dedenroth Bernhoft told Jyllands-Posten that he expects Finanstilsynet to follow operations at banks more closely in the light of recent scandals such as the suspected whitewashing of vast sums of money at Danske Bank's Estonian branch.

“If they had done this at Danske Bank, the authority would have known about the money laundering problems a lot earlier and there would have been opportunity for a friendly discussion with the bank's leadership – which is what should have been done,” Bernhoft told the newspaper.

MPs have expressed concern over the apparently lenient approach of the Danish watchdog.

Hans Kristian Skibby, businesses spokesperson with the Danish People's Party, said it was “highly regrettable” that more stringent action had not been taken by Finanstilsynet.

Social Democrat MP Morten Bødskov, who chairs the parliamentary businesses committee, has called Business Minister Rasmus Jarlov to consultation. Bødskov wants to know whether Finanstilsynet will face consequences over the issue.

“This gives the government a problem to explain,” Bødskov said to Jyllands-Posten.

“The key question is: who decided that laws passed by parliament should not be applied to their full extent?”, he added.

READ ALSO: Danske Bank value plummets in midst of money laundering scandal

 

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