Scandal Danske Bank: Suspicions of money laundering spread to Deutsche Bank

      Comments Off on Scandal Danske Bank: Suspicions of money laundering spread to Deutsche Bank

New rebound in the Danske Bank scandal. During his hearing before the Danish parliament, whistleblower Howard Wilkinson explained that, of the 230 billion dollars of doubtful origin, about 150 billion have passed through the " American subsidiary of a European bank ".

Although Deutsche Bank has not been mentioned by name or any other institution, it is the first German bank that feeds the suspicions. Deutsche Bank has been the main correspondent bank of Danske Bank in Estonia for dollar transactions until 2015.

A diagram of the whitening system around Danske, according to Howard Wilkinson.
A diagram of the whitening system around Danske, according to Howard Wilkinson.

The whistleblower, former British executive of the Danish bank in Estonia, also highlighted the potential involvement of US banks, including JPMorgan which ceased to be a correspondent bank of Danske in 2013. Deutsche Bank, JPMorgan and Bank of America have been approached by US authorities on this issue. In total, 10 banks, including three branches of Danske, are involved in dirty money flows.

This is the first public appearance of Howard Wilkinson, responsible for trading in the Baltic countries from 2007 to 2014, since the outbreak of the case. The bank offered him severance pay in exchange for his silence. However, he was given permission last month to speak to the US authorities.

The Estonian subsidiary of Danske Bank is at the heart of a huge money laundering scandal. Between 2007 and 2015, about 200 billion euros of its portfolio of non-resident customers, central in suspicion, would have been brewed by the subsidiary. Without being able to give an exact amount, the Danish bank has conceded that a large part of this portfolio is of questionable origin and potentially derived from illegal activities from Russia.

The role of regulators

During his audition, Howard Wilkinson criticized the regulators' wait-and-see attitude. As an example, he points out that nearly 9 years elapsed between the first warnings and the first "reprimand" addressed to Danske.

Questioned by parliamentarians, Jesper Berg, head of the Danish regulator (FSA), responded by trying to capture the mood of the moment: " Two years ago, politicians wanted us to welcome bankers with open arms. Today, some people want us to hang them. We will not do one or the other, we will respect the law ".

Howard Wilkinson will speak in front of the European Parliament this Wednesday during a hearing on " the fight against money laundering in the European banking sector ". Danske Bank's acting boss, Jesper Nielsen, will also be auditioned.

Etienne Goetz