Latvia Scandal Places ECB Under Spotlight as Bank Supervisor

U.S. claims that a Latvian bank laundered money and violated sanctions on North Korea led to the lender’s demise in little over a week, turning the spotlight on the European Central Bank’s role as chief supervisor for euro-zone lenders.

The U.S. Treasury proposed banning ABLV Bank from doing business in dollars, but the ECB doesn’t have the power to police money laundering. It is responsible for ensuring senior bankers are up to the task of running their firms, though, and on the weekend was forced to declare the lender failing or likely to fail after depositors fled.