Financial safety

Europe’s Dirty Money Scandals Highlight Absence of Credible Cops

A widening money-laundering scandal has exposed weaknesses that Russian criminals have exploited for years, increasing the prospect of U.S. authorities stepping in with draconian fines of their own. In Europe, a patchwork of different systems and rules has hindered the policing of laundering, with no central agency charged with investigating crimes that by one estimate may total as much as $2 trillion globally each year.

With a financial system barely recovered from a decade of serial crises, policy makers in European capitals need to strike a balance between tightening the screws on their own lenders and keeping banks on the road to sustainable profitability. Financial institutions from Stockholm to Amsterdam face uncomfortable questions about their handling of tainted funds, with investigations under way in the Baltic nations, the U.S., the U.K. and the Nordic countries. Almost daily revelations suggest there are more surprises to come on the misconduct.