Bankers Diary

Danske Bank Money-Laundering Scandal Drags Down Deutsche Bank

Deutsche cuts back correspondent banking after Danske scandal, Stephan Wilken, Anti-Financial crime and anti-money laundering, Deutsche Bank, ATM Fraud True Stories,Beard Banker Banking Stories, German Finance Minister Olaf Scholz

In the rouse of an investigation of over 200 billion euros ($229 billion) in alleged Money-Laundering Scandal at Danske Bank’s Estonia branch, Deutsche Bank has said it has suddenly cut down on its communicator banking services, according to a report by Reuters.

While taking about money-laundering scandal, Stephan Wilken, the bank’s head of Anti-Financial crime and anti-money laundering, said the bank’s worldwide correspondent portfolio is about 40% smaller than it was in 2016. Speaking to a committee of the European Parliament, Wilken said the bank’s portfolio of potentially high risk correspondent banking customers is 60% less than it was in 2016, as well.

In Money-Laundering Scandal almost 200 billion euros were stimulated from 2007 to 2015. Deutsche said it replaced as a correspondent bank for Danske Bank in Estonia, and that it helped to transfer funds for the bank from Estonia to other places around the world, like New York. Deutsche Bank said it didn’t know about any malfeasance in terms of the transactions, and that it’s cooperating with authorities during the interrogation.


Wilken also told parliament that Deutsche Bank also cut down active correspondent banking ties in Russia by about 75% since 2016, and it has stopped doing business in Moldova, Estonia and Latvia. In other Deutsche Bank news, German regulators recently said they were prepared to support a merger of Deutsche Bank and Commerzbank to create one-banking giant.

The move is an acknowledgment about the health of the two banks as standalone entities. A senior regulator said that he had looked over the plan and unofficially backed the idea of integration the two banks. German Finance Minister Olaf Scholz and the Social Democratic Party have been pushing for the merger.

This is a decision about industrial policy and it has to be made by politicians, the regulator said, adding that Chancellor Angela Merkel’s conservatives are also backing the idea of a merger.

One person close to Cerberus Capital Management, the investment firm that owns a lot of shares in both banks, said the executives wouldn’t block a deal if it got the blessing of the German government.

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