The European Commission has proposed tougher supervision of all financial institutions to prevent money-laundering threats.
The proposal comes at the time when multiple incidents involving money laundering in some EU banks have surfaced.
Besides undermining the reputation of the European financial sector, such incidents have caused significant financial instability for the respective banks.
The commission aims to amend the Regulation establishing the European Banking Authority (EBA) to offer it anti-money laundering supervision authority of the financial sector.
It is aimed at safeguarding the integrity of the EU’s financial system as well as ensure protection against financial crimes.
Commission vice-president Valdis Dombrovskis said: “Europe’s Banking Union must be built on the highest standards of integrity. Anti-money laundering supervision has failed all too often in the EU.
“Today we are enabling the European Banking Authority to make sure that different supervisors cooperate and exchange information and that anti-money laundering rules are enforced effectively across EU countries.
“The EBA will also be entitled to request investigation into alleged breaches of the rules and will become Europe’s phone number for cooperation with international partners on issues related to combatting money laundering in the financial sector.”
These proposals will now be discussed by the European Parliament and Council.
Once approved, EBA can call the national anti-money laundering supervisors to investigate potential material breaches and help them comply with the EU rules.
It will also be able to facilitate information exchange between national supervisory authorities and cooperate with non-EU nations to investigate cross-border cases.
Additionally, EBA can bring together all national anti-money laundering supervisory authorities under a permanent committee.