We saw that non-residents made up a considerable part of the bank’s business and were told that while that is correct risks are under control. That we are diligent and have internal audit. That was not really the case.
Were you told that precautions would hold by the headquarters in Denmark or by the Estonian branch?
We make no distinction there.
Yes, I understand that it was a branch of a Danish bank; however, the distinction is critical because, according to the report, Copenhagen claims it was given misleading information from Estonia.
What Danske Estonia told Copenhagen is a part of bank governance that falls in the jurisdiction of the Danish financial watchdog. Estonia is only looking at select matters concerning that branch. However, the Danes had the capacity for on-the-spot-checks, that much is for sure.
You did not look for a contact with Copenhagen; however, as it was evident you couldn’t handle their employees in Estonia, that they would keep telling you the same fairy tale without really changing anything, perhaps you should have been more active in talking to the Danes?
We contacted the Danish supervision. When we see a problem at a branch of a Danish bank, we turn to the Danish watchdog. They decided the following steps, contacted Copenhagen and asked for an explanation.