Sunday 25 August 2019

Laundering risk to Irish finance area - Minister

Minister Michael D’Arcy
Minister Michael D’Arcy

David Chance

A RAFT of high profile money- laundering cases across Europe has highlighted the need to guard against illicit transactions here as the finance sector becomes more important to the economy, Minister of State for the Department of Finance Michael D'Arcy told a banking conference yesterday.

Europe has been shaken by money-laundering scandals at Danske Bank and Swedbank in which hundreds of billions of euro of illicit funds flowed from Baltic operations.

Please log in or register with Independent.ie for free access to this article.

Log In

Regulators are pushing to expand their powers across the EU to cope with the issue to improve co-ordination and enforcement across fragmented national jurisdictions.

"Ireland is a small, open economy with a systemically important financial services sector," Mr D'Arcy told the Federation of International Banks in Ireland conference.

"That means that reputational, financial and systemic risks arising from money-laundering activities are not an insignificant risk," the Minister, who has special responsibility for financial services, said.

The Financial Stability Board (FSB), a body charged with monitoring global industry risks, said the assets held outside the traditional finance sector here are now equivalent to 14 times the size of the economy. It said there are growing concerns that they expose the State to global risks, with the FSB saying that the exposure of domestic banks to these bodies is equivalent to 10pc of their balance sheets.

The Cayman Islands, China, Ireland and Luxembourg account for two-thirds of the growth in this sector since 2011, according to the FSB.

The Central Bank this week warned that exposures from the commercial real estate sector "could be transmitted to domestic financial markets and the real economy".

Irish Independent

Also in Business