STOCKHOLM (Reuters) - The head of Sweden’s financial watchdog said on Thursday the agency had not been good enough at combating money laundering in the past, after recent media allegations linked two of the country’s biggest banks to a Baltic money laundering scandal.
Swedbank and Nordea are among several banks that have been dragged into the scandal, which centers on 200 billion euros ($226 billion) of suspicious transactions originating in Russia and elsewhere that flowed through Danske Bank’s Estonian branch between 2007 and 2015.
“I think we have to admit that we, in Sweden, and other regulators, have done too little,” Erik Thedeen, head of the Swedish Financial Supervisory Authority (FSA), told reporters after testifying in a closed hearing arranged by the Parliament’s Finance Committee.
“We can do more and we will do more, and I think that the whole Swedish system must be strengthened.”
Thedeen said he would redirect the agency’s resources and ask for additional funds to bolster its money laundering oversight.
The Swedish government said on Thursday it would put forward a bill giving greater leeway for the tax authority to investigate suspected money laundering.
The Swedish FSA and its Estonian counterpart have opened a joint investigation into the allegations against Swedbank and Thedeen said the Nordic and the Baltic watchdogs would work much more closely in the future.
“We will soon meet and start operational cooperation, not just information exchange,” he said.
The FSA has faced criticism after whistleblowers within the organization said top brass ignored recommendations from its own investigators to issue sanctions against SEB bank and Swedbank for insufficient anti-money laundering safeguards. “Our decision was well-founded and correct. What our experts wanted to do had to go through the quality control that I’m responsible for and that resulted in us not sanctioning the banks,” Thedeen told reporters.
He said he had the full confidence of the government and had faced no calls to resign.
Fredrik Olovsson of the governing Social Democrats and chairman of the Finance Committee welcomed Thedeen’s comments, but warned the banks they would have to foot the bill for increased supervision.
“If we increase supervision, then the banks should be charged for more supervision,” he told reporters. “It’s important to say that it isn’t the taxpayers who will pay for this.”
“Banks can also afford to pay more sanction fees than they do. I think the FSA should take a tough stance.”
Additional reporting by Esha Vaish; Editing by Mark Potter