RBS Chairman Says Bank Will Look at Money Laundering Allegations

(Bloomberg) -- Royal Bank of Scotland Group Plc is looking at the allegations of money laundering at ABN Amro, the Dutch lender it acquired during the financial crisis, Chairman Howard Davies said in an interview on Bloomberg Television.

“The allegation that we discovered only yesterday, so my state of knowledge of this is not hugely deep, was that some of the Russian money went through an ABN Amro entity which we acquired in 2008 and a business which has been closed down subsequently," Davies said. “That makes it quite difficult to know whether this was before we bought it or after we bought it, who is responsible for it.”

Several European banks have been drawn into money-laundering allegations centered on dirty Russian money. Dutch newspaper Trouw and magazine De Groene Amsterdammer reported that the so-called Troika Laundromat moved about 190 million euros ($215 million) through a unit of ABN Amro that became part of RBS.

RBS -- once one of the world’s largest banks -- has been transformed into a largely domestic retail bank by Davies and Chief Executive Officer Ross McEwan. It was nationalized by the British government a decade ago after being sunk by bad loans stemming from the ABN Amro deal.

Davies said the lender will work on the latest allegations and added that the anti-money laundering system in Europe needed improvement. "More centralized anti-money laundering controls and standardized systems probably makes sense in the euro zone. If you ask me, I suspect in three or four years there will be a euro-zone anti money laundering regulator,” he said.

RBS shares fell as much as 2.5 percent in morning trading in London, as affected banks across Europe felt the sting of the latest Troika Laundromat report.

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