BaFin, the financial regulatory authority of Germany, has expanded its mandate on Deutsche Bank.
The mandate was initially deployed to prevent money laundering and terrorist financing by requiring the bank to review its group-wide risk management processes surrounding banking and make necessary adjustments.
BaFin has increased the mandate of the special representative which was appointed to this case and will report and assess the progress of the review.
These measures were needed due to Deutsche Bank’s role in the Danske Bank money laundering scandal. During the events, Deustsche Bank reportedly acted as a correspondent bank for Danske Bank Estonia and helped to transfer funds, according to a number of reports in the media.
Earlier this year, it was reported the Danish government was exploring changes to how the financial regulator interacts with banks, and guarantee relationships are not too close. There are no specific measures outlined as of yet, but developments are expected to be made early this year.
Last year, the European Commission proposed to bolster the fight against money laundering through the deliverance of new powers to the European Banking Authority. On the back of AML failures by Deutsche Bank, Danske Bank and ING, Jean-Claude Junker, president of the European Commission, stated there were certain failures within AML rules and how they are not always being supervised.
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