European countries have failed to address financial crime and it is time to take action, the Latvian finance minister told CNBC Wednesday.
The Latvian ABLV, the Danish Danske Bank and the Dutch ING have all recently been involved in scandals over money laundering and financial crime. Dana Reizniece-Ozola, finance minister of Latvia said that these cases have "opened a Pandora's box" and asked banks do to more to prevent such situations.
"Countries in the European Union have been oblivious in fighting financial crime," the finance minister told CNBC's "Squawk Box Europe."
"Something has to be done, not only at the national level but also at the European level, like probably strengthening the EBA (European Banking Authority)," she suggested.
In the case of ABLV, the U.S. Treasury accused the bank earlier this year of "institutionalized money laundering," including allowing its clients to conduct business with parties connected to North Korea, which would violate sanctions imposed by the United Nations on the country. At the time, ABLV said the accusations were based on assumptions and information that was then unavailable to the bank.
When the scandal emerged earlier this year, European institutions were criticized for not having the means to oversee and prevent money laundering in the financial system.
This issue has been under further scrutiny after the head of the Danish lender, Danske Bank, resigned last week following a money laundering investigation into the bank. Earlier this month, ING agreed to pay 775 million euros ($910.20 million) in penalties for failing to stop several companies to allegedly launder money over a six-year period.
Separately, German regulators on Monday ordered Deutsche Bank to take internal actions to prevent money laundering.
"The game cannot be won only by one side playing, only by the government playing. The private sector, namely banks themselves have to participate and demonstrate a strong dedication," Reizniece-Ozola said, adding that "this is the right time" to take action.