The EU is no match for the Financial Crime Gangs



According to Elisa Martinuzzi, in its story on “Financial Crime” noted that the weak monitoring from the bank boards and the watchdogs, as well as their flexible supervision has again heightened the vulnerability of Europe to dirty cash. Recently, many big lenders in Europe including ABN Amro Bank NV and Swedbank have been accused of allowing criminals move with their dirty cash uninterrupted. Although the European Union is taking fast actions to combat money-laundering but its actions still seem less-effective. Elisa said that the bloc’s finance minister last month approved a plan to build a regional agency that would be responsible for fighting money laundering and terrorism financing. It is a pity that 58 authorities are presently in charge of coordinating this stuff. The emergence of many virtual currencies is also a threat to financial institutions as new form of money laundering are emerging through blockchain and crypto-technology, unless significant regulations are made against digital currency, European banks will remain at risk.

Elisa said that in spite of the Single Supervisory Mechanism – the European Central Bank’s regulatory arm, developed to give the EU agency absolute authority over the continents’ biggest lenders as well as small lenders, who are more vulnerable to money lenders, Europe will still be kept behind for years with a lot of national laws and data requirements. It will be very difficult to design a framework that will harmonize the working relationship of the new EU agency with national prosecutors, police, and financial intelligence units, and unless effectively funded, the new agency may also fail.

Last month, Hoeskra said that the problem of money laundering seems to just begin because it is not only connected with a few banks in certain jurisdictions. As new financial technology companies are developed giving rise to another possibility of money laundering, it is important to fix these. Even though banks have the required resources to tackle financial crimes, they still don’t do it well as 2016-2017 witnessed a rise in breaches in identifying customers and beneficial owners of corporate entities. Brexit is set to separate Britain’s powerful financial hub from EU thereby posing a great threat to the bloc’s supervisors as they may not capable enough to monitor the growing financial firms.