Spuerkeess successfully negotiated down a "substantially" higher fine from Luxembourg's financial regulator, MPs learned Tuesday, as parliamentary scrutiny of the bank's anti-money laundering failures intensified.

A €5 million fine imposed on Spuerkeess by the Financial Sector Supervisory Commission (CSSF) was originally "substantially" higher, it was revealed during a visit by the bank's administrative board to the parliamentary finance committee on Tuesday.

The penalty was levied due to identified weaknesses in the bank's anti-money laundering framework. According to discussions, the final amount was reduced following an exchange of views between the CSSF and the bank.

It also emerged that an evaluation of Spuerkeess's management and administrative board has been, or is being, brought forward from its original November date. The audit firm Oliver Wyman is responsible for verifying the state-owned bank's compliance with all applicable regulations.

Politicians from both the majority parties and the opposition welcomed the bank's recent acknowledgment of the situation's seriousness, which comes five years after initial reprimands. However, this delayed response was a point of contention.

Taina Bofferding, head of the Luxembourg Socialist Workers' Party (LSAP) parliamentary group, and MP Sam Tanson of the Green Party (Déi Gréng) questioned why Spuerkeess is only reacting now. Both MPs also criticised the bank for not accepting shared responsibility for the Caritas fraud, noting that the administrative board itself had mentioned internal disagreements with management.

MP Tom Weidig of the Alternative Democratic Reform Party (ADR) wondered why the CSSF – having already identified weaknesses at Spuerkeess in 2020 – did not respond after receiving a letter from the bank.

The committee's chair, MP Diane Adehm of the Christian Social People's Party (CSV), stated that committee members would "need some time to let everything that was said sink in." She also pointed out that MPs are still awaiting relevant documents, including minutes from Spuerkeess's board meetings.

"No taboos"

The Tuesday meeting followed a discussion on Monday between the committee and the bank's management, Prime Minister Luc Frieden, and Minister of Finance Gilles Roth. Minister Roth had stated that there would be "no taboos" regarding the consequences of the identified failures at the state-owned bank.

Following the committee meeting, neither the bank's management nor its administrative board officials commented to the press. However, board chairman Camille Fohl indicated that a public statement would be made "in due course."