As Danske Laundromat Shuts, Small Banks Are Told They’re Targets

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Denmark’s financial watchdog is telling smaller lenders to brace for an assault by money launderers as big banks respond to intense regulatory scrutiny and improve their defenses.

The head of the Financial Supervisory Authority in Copenhagen, Jesper Berg, says smaller institutions are now particularly vulnerable. The comments come amid a string of revelations alleging that Danske Bank A/Swas used to launder more than $8 billion from Russia, Moldova and Azerbaijan from 2007 to 2015. The steady flow of information about Denmark’s biggest bank has resulted in much tougher oversight.

Berg says the dynamic across the industry has changed considerably. Part of that is a response to the scandal surrounding Danske, which has seen its market value slump by a fifth this year, almost double the drop in Bloomberg’s index of European financial stocks.

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