The scandal that has engulfed the Danske bank in Denmark could well spread to other European states, it is feared. A whistleblower gave testimony this week that many more banks and shell companies were involved in the infamous fraud, including Deutsche, JPMorgan and Bank of America.
Jesper Berg, head of the Danish regulator, said that Danske had done a poor job of hiding the identities of those involved in the transactions, meaning other banks may now be in the firing line for exactly what they knew, or should have known.
“It is my impression that the Swift transactions were not manipulated, so it has been relatively evident, to those who received these Swift transactions, what kind of customers they were dealing with,” Berg said.
The main whistle blower, Howard Wilkinson, ran Danske’s Baltic unit. He has said Russian money went from Russian banks to Danske Estonia, as well as branches in Lithuania and Denmark. From there it moved into the global system from the three correspondent banks.
Deutsche has hit back, saying: “your only relationship is with the bank and the bank itself has the responsibility to check its own client to monitor the transaction and to do all these kinds of checks.” An investigation by BaFin, the German regulator, is underway. But the biggest headache for Danske may be the investigations in the US which are already in motion.
The Danske scandal alone was damaging to the EU but this will only worsen if more and more institutions are dragged in. It is not clear so far that the EU response has been sufficiently robust.