Two of Sweden’s major banks have been fined and heavily criticized for their lax anti-money laundering controls, damaging the reputations of some of Europe’s top lenders.
Nordea, the first bank in the Nordic region, was submitted to the most swingers comments from the Swedish financial regulator, who noted that there was a high probability that “if people tried to launder money or finance terrorism, they could have done so without Nordea being able to detect it”. He was fined 50 million Swedish kronor, the maximum under the law in force at the time.
Handelsbanken, hailed by many analysts as the model of the European bank, was fined SEK 35 million after failing to conduct risk assessments for all clients, resulting in high risk it could be used for money laundering.
Swedish banks escaped both the global financial crisis and many of the scandals that followed regarding the fixing of interest rates or exchange levels that plagued other major European banks. But the reputation of Nordea and Handelsbanken is likely to tarnish the harsh tone of the Swedish Financial Supervisory Authority.
“It was bad, really bad,” FSA chief legal adviser Per Håkansson said of Nordea. “They didn’t even know they had high risk clients.”
The FSA has said that more than SEK 100 billion is laundered in Sweden each year and that banks must ensure that where there is a high risk of illegal activity, additional checks are carried out on customers and clients. transactions. Instead, he found that Nordea did not follow the rules, did not perform basic checks on customers, and had an “extremely substandard” automatic system to review transactions.
Nordea, which had already been fined in 2013 for complying with money laundering regulations, was told it had “major failings” over several years after receiving a warning and l maximum fine Tuesday.
Christian Clausen, CEO of Nordea, said the bank has stepped up its compliance work since the investigation began in 2013. “We take this decision very seriously. We recognize that we initially underestimated the complexity and resources required to be fully compliant in this area, ”he added.
Handelsbanken received less reprimand, but still criticized for failing to assess the risk posed by all of its clients and therefore did not know which clients were most at risk.
The Swedish FSA is now able to impose fines of up to 10 percent of a bank’s turnover, but was limited to a maximum of SEK 50 million by the legal regime in place at the time of this investigation. .