By Kristin Broughton
Financial regulators in eight Nordic and Baltic countries have agreed to share more information about money-laundering threats in an effort to fight financial crimes.
Regulators said they plan to develop a coordinated process for exchanging information across Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. A formal agreement among the agencies is being drafted, the regulators said.
The measures by Nordic and Baltic regulators comes as banks in the region face questions about safeguards for spotting financial crimes. The questions have had a significant impact, prompting credit ratings firms to cut their outlooks and banks to reshuffle their management. The move is the latest joint effort by financial regulators and banks across the globe to improve their anti-money-laundering compliance.
Swedbank A/B is facing a series of investigations into its handling of customers who displayed potential money-laundering risks. Danske Bank A/S, meanwhile, is looking to turn the page after it disclosed that $230 billion of potentially illicit funds, mostly from Russia, may have passed through its Estonian operations.
"Closer cross-border cooperation between supervision authorities plays a key role in strengthening anti-money-laundering capabilities across the region, Vytautas Valvonis, director of the Bank of Lithuania's supervision service, said in a statement that accompanied the announcement of the agreement last week.
Regulators plan to share information from their onsite bank inspections, Morten Baltzersen, director general of Norway's financial regulator, Finanstilsynet, said in a statement.
A formal agreement among regulatory agencies is expected to be finalized in the coming months, Mr. Baltzersen said.
A spokeswoman for Swedbank said the bank welcomes the tighter collaboration among regulators. "Money laundering has become a race between criminals and legislators, authorities, financial institutions and financial intelligence units," she said. "This step will strengthen the anti money laundering work and our collaboration with the authorities."
A spokesman for Danske didn't immediately respond to request for comment.
Financial regulators in Nordic countries have a long track record of sharing information with each other, according to Monique Melis, a managing director in Duff & Phelps LLC's compliance and regulatory consulting practice. The effort to include Baltic regulators highlights concerns about transactions with links to Russia, she said.
The recent tumult at Danske and Swedbank has prompted Scandinavian regulators to take a stronger stance on anti-money laundering, Ms. Melis said. "They sort of sailed through the last banking crisis, and now this is a major issue," she said.
Financial information-sharing efforts have taken hold elsewhere in the world. Several of the biggest U.S. banks, for instance, have been working together to share data, such as the names of potentially suspicious account holders and dates of financial transactions.
Such efforts, which also have been launched in Australia, Singapore and the U.K., have attracted pushback from consumer privacy advocates, who have expressed concerns about the handling of sensitive data, among other issues.
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