EBA investigates regulators over Danske Bank

EBA has opened a formal investigation into possible breaches by the Estonian and Danish financial services regulators of EU law in connection with the links of Danske Bank and, in particular, its Estonian branch, with money laundering. The investigation follows a request from the European Commission, pointing out the duties of home and host state supervisors under MLD4. The letter explains the Commission’s understanding that the Estonian regulator had carried out inspections of the bank, but queries whether the inspections were thorough enough and appropriate sanctions applied. The letter also notes the Commission’s understanding that the Estonian regulator informed its Danish counterpart of the Estonian branch exposure to non-resident deposits, but it is unclear what the Danish regulator – as supervisor of the bank’s group-wide policies – did on receipt of the information.