A massive money-laundering scandal stains the image of Nordic banks

DANSKE BANK’S headquarters in Copenhagen, reminiscent of a Greek temple, speaks of an illustrious past. But Denmark’s biggest bank has “no vanity left”, says a spokesman. Since 2008 it has been embroiled in a disaster every five years. After one during the financial crisis, it was again in crisis mode in 2013 when the board sacked Eivind Kolding after 18 catastrophic months at its helm. Last year Thomas Borgen, Mr Kolding’s successor, resigned amid revelations about Danske’s role in a vast money-laundering scandal. In May Mr Borgen was charged by Denmark’s prosecutor.

The money-laundering crisis is the most damaging yet for Danske, and for other Nordic banks allegedly involved. Last year the Organised Crime and Corruption Reporting Project, a group of investigative journalists, gave Danske its “Corrupt Actor of the Year” award. How did the bank squander its good name—and can it regain clients’ and regulators’ trust?

The saga started in 2007, when it bought Finland’s Sampo Bank, which came with a branch in Tallinn, Estonia’s capital. In the same year Estonia’s authorities found flaws in Sampo’s procedures, and the Russian central bank told Danish supervisors that non-resident customers were participating in transactions intended to dodge taxes and customs payments, or to launder “billions of roubles monthly”. The...

Read More