Denmark’s government is reportedly looking to implement changes to how close its financial regulator gets with banks it supervises.
Coming as a precaution after the €200bn money laundering scandal at Danske Bank last year, the government wants to implement these measures to ease concern over regulatory capture, according to an article by the Financial Times which cites Denmark’s business minister Rasmus Jarlov.
While there have been no specific measures outlined by the government presently, it is set to do a lot of work strengthening the Financial Supervisory Authority of Denmark throughout the beginning of 2019. Developments will be made in response to experience of the Danske Bank incident and from the experience of other countries, the article said.
The government is allegedly looking into how it can establish the right balance of getting ‘competent people’ from the banking sector into the regulator and ensuring there is no conflict of interest.
FSA head Jesper Berg stated in the article that he believes there is no regulatory capture in the group. Regulatory capture is where an authority potentially fails to act on behalf of the public but is influenced by operations and outcomes of major players in the sector it monitors. He said that the regulator has a ‘frankness’ in its reporting.
Last year, Danske Bank was found of money laundering after it was uncovered that €200bn had flowed from Russia and other ex-soviet states through an Estonian branch of the bank, lasting nine years.
The Danish Financial Supervisory Authority is currently looking to increase the fines which are related to money laundering crimes, by as much as eightfold. This will be established through a new bill which was proposed in October.
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