European banks fined over $16 billion from 2012 to 2018 related to money laundering

European banks were fined over $16 billion from 2012 to 2018 related to money laundering and trade sanction breaches, Moody's Investors Service says in a report published today, Report informs.

European banks face more investigations after paying over $16 billion in fines from 2012 to 2018 for facilitating money laundering and trade sanction breaches, and for weak controls.

"In some cases, supervisors have offered banks deferred prosecutions in exchange for a period of additional regulatory oversight, during which they must improve their risk and governance frameworks," said Sean Marion, Managing Director at Moody's. "This usually entails sustained large-scale investment in their compliance and operations functions, which although credit positive can hit profitability."

US regulators levied more than 75% of the fines. The US is now investigating Danske Bank, which admitted some failures in the anti-money laundering (AML) controls of its Estonia branch. Swedbank is also being investigated for some weak AML controls at Baltic operations, and preliminary investigations are ongoing at other Nordic banks. Italy's central bank has also found shortcomings in AML processes of ING Italy.