Scandal-hit states oppose plan for EU scrutiny of money laundering

A plan to boost European Union powers to curb the flow of dirty money through banks faced resistance at an EU meeting from member states recently hit by major money-laundering and financial fraud scandals, three officials told Reuters.

The EU is discussing how to strengthen its scrutiny of the financial sector after a spate of scandals in Estonia, Malta, Latvia, Cyprus and the Netherlands exposed how national watchdogs were slow at acting against banks who abetted or did not prevent money laundering.

EU Commission vice-president Valdis Dombrovskis, a former premier of Latvia, has refrained from proposing legislative changes but earlier in May reiterated possible options to clamp down on financial crime, including the transfer of monitoring powers from national watchdogs to an EU-wide body.

At a closed-door videoconference of EU finance ministers on Tuesday,...