Swedish Cabinet Calls in Watchdog to Explain Swedbank Crisis

(Bloomberg) -- Sweden’s Finance Ministry is calling in its banking regulator to explain what went wrong after money laundering allegations exploded at one of the nation’s largest banks.

After briefing parliament’s finance committee on Thursday, a top official at the ministry said it was taking the allegations against Swedbank AB “very seriously” and will also meet the director general at the Financial Supervisory Authority so he can “explain the latest events.”

The government already last year gave extra funds to the agency to more closely monitor the flow of cash and asked for a report back on its increased effort in November, Ulf Holm, a state secretary at the Finance Ministry, said in an interview.

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Holm said it has been good that the FSA has already exhibited some self criticism that “they perhaps should have had more contact with the authorities in those countries where Swedish banks have subsidiaries.”

“Money laundering is often an international matter where several countries are involved,” he said. “It’s a necessity to have more cross-border cooperation.”

The government has the support in parliament from all parties to look over the situation and no one is excluding the possibility of introducing stricter laws, he said.

Parliament’s finance committee will meet the financial watchdog’s director general, Erik Thedeen, at its meeting on March 7, according to the committee’s deputy chairman, the Moderate Party’s Elisabeth Svantesson.

"I have lifted the issue of the FSA and demanded that they come to the committee next week so that we can hear their view on their own role in this and how they think cooperation can be improved between authorities in different countries, as money laundering almost always takes place in flows between countries," Svantesson said in an interview.

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