Search Options
Home Media Explainers Research & Publications Statistics Monetary Policy The €uro Payments & Markets Careers
Sort by
Edouard Fernandez-Bollo
ECB representative to the the Supervisory Board

Money laundering must be tackled at European level

Contribution by Édouard Fernandez-Bollo, Member of the Supervisory Board of the ECB, for Revue Banque

6 April 2023

The new European Union (EU) anti-money laundering legislation is both a need and an opportunity for the banking sector. Negotiations are ongoing between the EU co-legislators – the European Commission, the European Parliament and the EU Council – on the anti-money laundering and countering the financing of terrorism (AML/CFT) legislative package.[1] The aim is to harmonise the regulation and establish an EU anti-money laundering authority.

A need to improve the quality and effectiveness of the supervisory framework at European level

Against the background of cross-border money laundering and terrorist financing transactions, AML/CFT legislation and supervision must be improved by further European integration.

First of all, we need to overcome the impediments coming from the current regulatory fragmentation, which stems from disparities in the transposition of EU directives into national law. The new EU regulation, which will be enforceable in the Member States, will rule out national discrepancies resulting from the transposition of directives.

Furthermore, the level of supervision must be harmonised and consistent across the euro area. This is the aim of the proposal for an EU regulation establishing a European AML/CFT authority. This authority will be responsible for the direct supervision of around 45 financial institutions, and for the indirect supervision, via national authorities, of most likely thousands of other institutions. These will include, in addition to credit institutions, payment institutions, money changers, insurance companies, investment firms and even crypto-asset service providers. This indirect supervision will therefore be key for the effectiveness of the framework, and the new European authority will need to coordinate and bring together the work of all other authorities involved, be they national AML/CFT supervisors, financial intelligence units or prudential banking supervisors such as the ECB. For example, a common methodology that will be used by the future European AML/CFT authority and national supervisors alike for assessing institutions’ exposure to money laundering and terrorist financing will further harmonise the identification of potential areas of vulnerability at European level. Given the scale of the task, it is crucial that this authority can rely on close cooperation between prudential supervisors and the three European supervisory authorities (ESAs) for the financial sector.[2]

To this end, it is essential that the exchange of information between the national and European authorities is improved. The new AML/CFT authority should therefore play the pivotal role of database hub, thereby ensuring cooperation and the exchange of information both between all AML/CFT supervisors and between the other supervisory authorities, namely prudential supervisors.[3] This hub role should also make it easier for the regulated entities to carry out their reporting obligations. As soon as it is established, the new authority should be given access to the relevant databases. As regards interactions with prudential supervisors, at least three areas are particularly relevant for the exchange of information and the coordination of action: the granting and withdrawal of authorisations, the assessment of management bodies’ collective suitability and the assessment of internal control frameworks. This exchange of information between prudential supervisors and the European AML/CFT authority will provide a better overview of the institutions’ governance and control frameworks.

For banks, this is an opportunity to streamline customer risk management processes while benefitting from the best international AML/CFT practices

Moving from 27 legislations to a single one should streamline the banks’ management of banking services processes. For instance, the customer identification and know-your-customer questionnaires, along with all the processes they entail, including the configuration of IT systems, could be harmonised across different entities of the same group within the EU. This should, in turn, facilitate customer relationship management, in particular with customers operating in several Member States. This first area of the European standardisation of customer relationship within the banking sector will produce concrete benefits for the Europeanisation of the functioning of the banking system and, by extension, for its customers as well. This initiative should change the day-to-day lives of banks and their customers, and help to harmonise the European banking market.

Lastly, this level of European integration will give Europe more weight on the international stage: indeed, once the EU is equipped with more effective supervision and harmonised standards, it will become an international benchmark in the field. European banks will be at the forefront of AML/CFT, and European standards will play a greater role in discussions held within international organisations such as the Financial Action Task Force.


The creation of a European AML/CFT authority is crucial if we want to put an end to regulatory fragmentation in the EU while, at the same time, improving supervision. This authority will harmonise and bring together the best national practices. To this end, data sharing and effective cooperation between AML/CFT supervisors and supervisory authorities will be needed. Supervised institutions will also benefit from these developments given that harmonisation will streamline the applicable regulatory framework and they will be able to benefit from the best international practices in this regard.

  1. The package comprises four texts:
    (i) Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing the Authority for Anti-Money Laundering and Countering the Financing of Terrorism and amending Regulations (EU) No 1093/2010, (EU) 1094/2010, (EU) 1095/2010;
    (ii) Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing;
    (iii) Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the mechanisms to be put in place by the Member States for the prevention of the use of the financial system for the purposes of money laundering or terrorist financing and repealing Directive (EU) 2015/849;
    (iv) Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on information accompanying transfers of funds and certain crypto-assets (recast).

  2. The European Banking Authority, the European Financial Markets Authority, the European Securities and Markets Authority, and the European Insurance and Occupational Pensions Authority.

  3. Aside from prudential supervisors, the other supervisory authorities include financial intelligence units and law enforcement authorities.


European Central Bank

Directorate General Communications

Reproduction is permitted provided that the source is acknowledged.

Media contacts