New Riksbank Rule Could Shut Out Money Laundering Violators

(Bloomberg) -- The Swedish central bank is putting the finishing touches on new rules that would allow it to exclude banks that run afoul of money laundering rules from its vital payment infrastructure.

The rules that are planned to be introduced in April would under some circumstances evict lenders from its RIX system if they fall short on anti-money laundering efforts, according to the Stockholm-based Riksbank. RIX is key to operating a bank, in that it provides the central system for moving large sums of cash within the banking system and also includes the Debt Office and clearing groups.

It’s stark reminder of the potential consequences as authorities try to crack down on bank malfeasance after a string of international scandals. One of Sweden’s bellwether lenders, Swedbank AB, now finds itself embroiled in an alleged Baltic money laundering scandal. A report this week by Swedish broadcaster SVT alleged that Swedbank handled 40 billion kronor ($4.3 billion) in suspicious flows tied to the Danske Bank A/S Estonia scandal.

Christina Wejshammar, head of the Riksbank’s department of payments, said that the Riksbank is following the case and is in close contact with the Financial Supervisory Authority, which is investigating the allegations.

“We’re following it as Swedbank is one of the participators in RIX and it’s important that it abides by the rules,” she said.

The central bank also said that it’s not possible to say beforehand under what circumstances that a bank could be shut out of RIX.

“You need to take the whole situation into account.” Wejshammar said. Action by the FSA could be “one of the ingredients,” she said.

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