Banks, EU – Baltic States, Financial Services, Latvia, Risk management
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Thursday, 25.04.2024, 20:57
Combating money laundering requires common European framework – ECB
"Combating money laundering is hard work and it also requires a
sound legal framework. In Europe, this area is also governed by a directive,
which means there is a risk of it being implemented in 19 different ways in the
euro area. I personally think that combating money laundering requires a common
European framework, hence a regulation rather than a directive. I also think
that it would be better to address the money laundering issue through a
European institution," said Nouy.
At the moment, the ECB directly supervises the largest banks of the euro
area, while money laundering investigations stay at the national level.
"I am sure that my colleagues are doing the best they can. But in
this relatively small country, compared with the rest of the euro area, which
has correspondingly small supervisory institutions, it is difficult to obtain
enough staff with the required expertise and experience to focus on this issue.
This is all the more critical since the geopolitical risks in this region, in
the Baltic and Scandinavian region, I would say, are not negligible,"
stressed Nouy.
She believes it would be better if there was an institution performing a
role similar to that of the ECB in the area of supervision.
"It would enable us to work on the prevention of money laundering
and to take the relevant decisions from a European perspective, which would be
much more powerful. I have talked to European legislators about this too, and I
am convinced that it will happen in the future as this, together with a fully
harmonized legal framework, would provide powerful solutions to the problems
faced by certain countries. But when we had those discussions, the development
of the new directive had already reached its final stages, so it was probably a
bit too late to transform it into a regulation," said Nouy.
Furthermore, it may be very hard to identify banks involved in money
laundering - for the most part, such banks are well capitalized, have no
non-performing exposures and have good liquidity. "If they were assessed
by a machine rather than the judgement of a supervisor, these banks would get
the highest evaluations. So this is a pretty complicated issue for a prudential
supervisor," said Nouy.
In Latvia the ECB currently directly supervises Swedbank, SEB Banka and Luminor Bank.
As reported, the ECB withdrew ABLV
Bank's license on July 12. That bank, too, was supervised by the ECB.