Danske Money Laundering Scandal Damages Denmark’s Reputation: Regulator


Denmark’s reputation as one of the global’s least corrupt places has been undermined with the aid of the cash laundering scandal engulfing its biggest financial institution, consistent with the u . S .’s monetary regulator.

In a record inspecting risks going through danish banks, the economic supervisory authority in copenhagen on tuesday singled out the harm carried out by danske financial institution a/s for its position in changing worldwide perceptions around the nordic united states.
Danske is under criminal investigation in several jurisdictions, consisting of in the u.S., amid accusations an estonian branch became a eu hub for cash launderers from the previous soviet union. The bank has admitted that a large bite of about $230 billion that flowed through the department till as lately as 2015 possibly needs to be treated as illicit in starting place.

Danske vs lehman
A recent observe determined that danske is outdone only by way of lehman brothers with regards to banks around the world with the worst reputations. Inside the tenth annual “agree with meltdown” file via media tenor, danske ranked 2nd-lowest. Lehman brothers failed in september 2008, triggering good sized panic as the occasion have become a seminal second in the international financial disaster that ensued.

Denmark’s reputation “for being one of the least corrupt countries inside the world has suffered sizable damage because of the danske financial institution case,” the fsa stated in its report on tuesday. The financial institution has belongings which can be kind of 1 half times denmark’s overall gross home product, making it the u . S . A .’s maximum systemically important bank.

The most important opposition party in denmark’s parliament, the social democrats, on tuesday introduced a suggestion searching for to punish the monetary zone with levies with a purpose to help finance an early retirement plan, specially for blue-collar employees. The celebration, that’s leading in most opinion polls ahead of general election later this year, desires to add 1.Five billion kroner ($230 million) of annual taxes to the united states’s banks.

The reputational harm that the danske case has introduced with it hasn’t yet translated into better investment expenses for most of the united states of america’s different banks, but any other scandal ought to change that, the fsa warned. Banks may then locate it more difficult to raise funding and to do economic transactions with foreign counterparties, it stated.

The cost of scandal
Danske had to pay investors a top rate to sell its bonds in advance this month, even as its market value plunged by means of approximately forty seven percentage ultimate year after shareholders balked at the consistent glide of terrible news. The financial institution faces hefty fines in reference to the criminal investigations, and traders within the u.S. Have filed a class movement regulation suit, amid threats that greater felony motion will follow.

“the cash laundering case at danske underscores the importance of powerful control structures,” the fsa said. In any other case, the outcomes may be giant, it said.

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