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21 February 2022

SSM's Fernandez-Bollo: For a fully fledged European anti-money laundering authority


European legislators have taken various steps in recent years to strengthen the link between anti-money laundering/countering the financing of terrorism (AML/CFT) and prudential issues.

Some things matter to you, even if you are not directly responsible for them. At the European Central Bank (ECB) it is not part of our tasks to supervise banks’ compliance with rules to prevent money laundering and terrorist financing. Yet money laundering and terrorist financing risks pose a danger to the sustainability of banks and can seriously damage people’s trust in the banking sector. This is why we really need a strong European anti-money laundering authority. It would also help us as prudential supervisors, because banks that struggle with issues in this area often suffer from structural deficiencies in their internal controls and governance arrangements, which do fall within the scope of ECB Banking Supervision.

European legislators have taken various steps in recent years to strengthen the link between anti-money laundering/countering the financing of terrorism (AML/CFT) and prudential issues. For example, prudential supervisors can now use the information held by AML/CFT authorities in authorisation procedures, when taking decisions about the suitability of management bodies, or as part of ongoing supervision. Similarly, AML/CFT authorities use the information shared by prudential supervisors.

We warmly welcome the proposal from the European Commission published last July to set up an EU AML Authority (AMLA). This will help to ensure that AML/CFT rules are applied more effectively and consistently across countries. The creation of this new authority matters to us, as banking supervisors, since AMLA and the ECB will need to cooperate in several areas to ensure efficient and effective supervision. Benefiting from the experience gained in building European banking supervision in the last decade, we have identified three main areas which in our view are key to ensuring the authority at the centre of this new EU-wide supervisory authority is well designed, as reflected in the ECB Opinion published today[1].

A wide scope of direct supervision

A strong and credible European anti-money laundering authority should directly supervise a sufficiently large number of entities from the outset. And this pool should include entities headquartered in each of the Member States to ensure that supervisory practices are aligned.

Our experience of building European banking supervision taught us that adopting significance criteria to include banks in all participating countries is essential to create a common approach to prudential supervision. This ensures that every national competent authority makes a substantial contribution to the ECB’s direct supervisory tasks. It also ensures that EU-level prudential supervision is present in each country, at consolidated and individual level. With that, the ECB has gained a thorough understanding of the banking sector across the entire banking union and has identified good practices across the EU...

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