Monday 20 May 2019

Sweden to tackle dirty money as bank fires CEO

Fired Swedbank CEO Birgitte Bonnesen
Fired Swedbank CEO Birgitte Bonnesen

Amanda Billner and Rafaela Lindeberg

Sweden's minister in charge of bank laws has criticised the country's biggest lender, Swedbank for its handling of money-laundering allegations and said the government is now willing to consider tougher legislation.

Per Bolund, Sweden's financial markets minister, said in an interview yesterday that the Swedbank scandal has left him "really angry". He spoke not long after the bank fired CEO Birgitte Bonnesen, amid concerns she misled the public about the scope of the laundering case.

The bank is now being investigated in Sweden, Estonia and the US. On Wednesday, its headquarters were raided by Sweden's Economic Crime Authority, which is also probing the bank for potential fraud.

The suspicious amounts that Swedbank allegedly handled may have been as high as $23bn a year between 2010 and 2016. "On point after point, they have chosen the wrong path," Mr Bolund said.

The scandal has rocked Sweden, a society usually associated with low levels of corruption and high standards when it comes to transparency. Swedbank is the country's oldest lender and the nation's biggest provider of mortgages, and at the heart of the Swedish financial system. The case also reinforces concerns that laundering is a much bigger issue than first assumed, with many of Europe's biggest banks recently implicated.

As recently as January, Ms Bonnesen adamantly denied any wrongdoing, and rejected suggestions that her bank might in any way be linked to the $230bn Danske Bank Estonian laundering scandal. She was backed by her board and shareholders. But as allegations piled up this week, shareholders had had enough.

The bank's market value has plunged by about a third since the scandal first broke on February 20, representing about €7.5bn in lost market value. Ms Bonnesen has told Swedish local media that she thinks she acted honestly.

Shareholders seem to disagree. At yesterday's AGM, they voted not to free her of liability for 2018. That clears the way for potential lawsuits against her.

Mr Bolund said that the "best thing" now for the bank is to "meet criticism with transparency." "If you don't handle the work against money laundering properly you undermine confidence among customers but also in the outside world and that also has a price tag in today's society," he said. Swedbank "obviously hasn't tried" to be transparent, he said.

Among measures Mr Bolund said his ministry would consider are cracking down on so-called revolving doors, so that it's harder for bankers and regulators to switch jobs.

He also said the government was "of course" willing to look into raising fines for money laundering.


Irish Independent

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