FRANKFURT, March 2 (Reuters) - The European Central Bank hasstopped supervising the Austrian arm of Russian state bank VTBafter it slimmed down its European operations, the ECB said onFriday.A spokeswoman for the ECB said VTB's new set-up in Europe nolonger warranted direct supervision, which was now in the handsof Germany's national regulators, Bafin and the Bundesbank.
Public scrutiny of ties between euro zone banks and Russiahas been heightened by the demise last week of ABLV Bank, aLatvian bank accused by U.S. authorities of facilitating large-scale Russian money laundering .VTB had conducted its European business from its Austrianunit, which the ECB decided to supervise directly in 2015 inlight of its ties to other countries in the currency bloc.But the Russian bank last year merged its Europeanoperations into a single subsidiary based in Germany, withbranches in France and Austria, in a bid to cut costs.
Russia's central bank rescued three major banks in 2017 andhas shut dozens of smaller ones over the past few years under aclean-up programme.
The ECB appears to have been blindsided by the ABLV case,highlighting how thinly it is spread in supervising Europe'sbiggest lenders and raising questions about a system of eurozone supervision just three years old.
As part of the changes published on Friday, the ECB has alsotaken up supervisions of the subsidiaries of Luminor Bank, partof Norway's DNB, in Latvia and Lithuania.Spain's Banco Mare Nostrum, which was merged into largerrival Bankia , and Danske Bank Finland, now part of itsDanish parent company dropped off the list ofsupervised institutions on the ECB's website.The changes left the ECB supervising 118 banks across theeuro zone's 19 countries (Reporting By Francesco Canepa, editing by Larry King)
004906975651247; Reuters Messaging:francesco.canepa.thomsonreuters.com@reuters.net)) Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.