Member states of the European Union (EU) have agreed to a preliminary deal to bolster supervision on banks in a bid to stop money-laundering incidents, Reuters has reported.
The preliminary deal supports the proposals made by the European Commission in September to empower the European Banking Authority (EBA) with anti-money laundering supervision authority.
According to the documents accessed by the news agency, the member states have agreed to provide the authority to the EBA to compel national supervisors to investigate suspicious money laundering cases.
EBA can also take appropriate measures if a bank is found to breach necessary obligations. The new plans are also supported by the respective governments.
However, the deal does not address other proposals of the regulator including creation of a dedicated agency to tackle money-laundering.
It also does not encompass the proposal of imposing sanctions to prevent such cases.
Why the new anti-money laundering rule?
EU proposed the new regulation when some of the European banks were jolted with incidents of money laundering.
The new regulation is aimed at ensuring stability of the European financial sector as well as deter similar incidents.
It will also enable to investigate cross-border cases and facilitate information sharing among national regulators.
The preliminary deal is expected to be finalised before the scheduled meeting between the EU finance ministers next month.