The European Central Bank (ECB) is set create new anti-money laundering authority to augment anti-money laundering supervision over high-risk banks.

The decision was announced by ECB chief supervisor Daniele Nouy.

It follows the recent preliminary deal agreed between European Union (EU) member states to step up supervision on banks to stop money-laundering.

ECB’s plans to curb money-laundering:

The decision was taken by Single Supervisory Mechanism (SSM), a legal framework authorising ECB as the sole supervisor of all banks in the region.

SSM will establish an anti-money laundering (AML) office, which will procure and share relevant information from its supervisors and other authorities.

“The AML Office will set up and chair ‘an AML Network’ among Joint Supervisory Teams in charge of the banks whose business model leads to a high level of money laundering risks,” Nouy told European Union parliamentarians.

In the recent years, multiple money-laundering incidents rattled the European banking network forcing the regulators to take a range of initiatives to stop such incidents.

Lenders accused of money laundering include Denmark’s Danske Bank, Malta’s Pilatus Bank and Latvia’s ABLV.

Currently, ECB does not have a legal authority to carry out investigations against money laundering.

A proposal to empower the European Banking Authority (EBA) to pursue such incidents has already been made by the ECB. Last week, the EU states supported the move to authorise EBA to carry out money-laundering investigations.