Why a Money-Laundering Case Hits Denmark Close to Home

Denmark’s status as one of the world’s least corrupt nations is being challenged by allegations that its biggest bank, Danske Bank A/S, was a central pipeline for channeling billions in illegal funds across Europe from Russia, Moldova and Azerbaijan. An internal report published Wednesday said the bank had failed to live up to its responsibilities. Its chief executive officer has resigned. The biggest money-laundering scandal in modern Danish history won’t end there. Danske faces criminal investigations, Danish lawmakers are calling for tougher penalties, and European authorities are citing the case as evidence of vulnerabilities in the region’s defenses against criminals.

In a literal sense, it didn’t. The suspicious funds were funneled through Danske’s branch in Tallinn, Estonia, from 2007 to 2015, the bank has conceded. (Danske acquired the branch in 2007, the same year Estonian authorities identified problems with non-resident accounts.) The head of Denmark’s financial regulator said it appears Danske had a culture of “mean and lean” that departed from the typical Scandinavian approach in which people “challenge and bring bad decisions up the chain" for the sake of “frank discussions and reaching a consensus."