THE FALLOUT FROM RUSSIAN MONEY LAUNDERING CONTINUES TO GROW FOR EUROPEAN BANKS
Nicholas Larsen, International Banker, 20 May 2019
On April 5, Lars Idermark resigned from his position as the chairman of Swedbank, headquartered in Sweden. Idermark stepped down from his position only a week after the chief executive officer, and previously the supervisor of Swedbank operations in the Baltic states, Birgitte Bonnesen, was fired. The moves come amid sweeping allegations that Sweden’s oldest bank was involved in laundering billions of dollars’ worth of Russian money. In particular, the lender’s Baltic units have been named as being complicit in handling illegal funds from Russia as well as other smaller former Soviet countries.
Swedbank is just the latest in a series of European banks that have been fingered for their suspicious activities, in what is gradually revealing itself to be the biggest money-laundering scandal in European banking history. Indeed, a somber picture is now emerging of predominantly Nordic lenders using their Baltic subsidiaries to move hundreds of billions of dollars for Russian oligarchs from former Soviet nations into the European banking system. The likes of Lithuania, Estonia and Latvia have all been implicated in the scandal at one stage or another, with their respective banking systems having developed since the collapse of the Soviet Union at least partly on handling flows out of Russia. Bloomberg Economics puts the figure at a hefty $1 trillion that has migrated out of Russia during the last 25 years.
