Posted by Ben Hutz.
One of Denmark’s Largest banks, Danske Bank, is under investigation for money laundering. The US and Danish authorities started their investigation in 2018 and it has been dragged on for years as they are trying to reach a settlement by the end of this year, 2022 . The reason behind this is they have been convicted of laundering money in Russia and other former Soviet states. They were able to do this because they have a branch in Estonia where most of the laundering happened.
The US treasury department is saying, “more than $230 billion flowed from Russia and other former Soviet states through its tiny branch in Estonia between 2007 and 2015. ” Most of the transactions were done mostly with US dollars and euros, but a large part of the money was illicit money. This not only hurts the bank of Danske, but Denmark’s reputation as a whole, as they were known to be the most transparent and least corrupt banks in the world.
This isn’t the first time that a big bank hasn’t been under fire as the HSBC holding, a UK bank, was linked to money laundering in Mexico in 2012. They got fined 1.9 billion dollars and other banks who have been found for similar money laundering accusations being fined up to 8.9 billions dollars. Danske Bank is estimated to be fined $2.1 billion. The public clearly thought that this was a light fine as when the news came out the bank’s shares rallied up 12% in that day alone. I agree with the public as they were able to launder money for years and it was over 230 billion dollars, which is over 100 times the amount of their fine.
Ben is a finance major at the Stillman School of Business, Seton Hall University, Class of 2025.