Vienna-based European American Investment Bank (EURAM) is facing imminent closure after Austria‘s financial Market Authority (FMA) filed for insolvency proceedings. The move comes after EURAM reported significant over-indebtedness, with liabilities estimated at around €300 million due too non-performing loans.
EURAM’s troubles have been brewing for some time. Earlier this year, the FMA imposed a ban on new business activities due to violations of austria’s Financial Markets Anti-Money Laundering Act. “The supervisory authority banned new business at the beginning of the year,” the FMA stated.
The FMA’s concerns centered on EURAM’s compliance with regulations aimed at preventing money laundering adn terrorist financing. As a result, the authority issued a notice to “establish the lawful situation” at the bank.
Deposit insurance Triggered
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Facing a precarious financial situation, EURAM was given an ultimatum by the FMA: either raise €25 million in capital or face dissolution. In mid-October, the bank’s operations were halted, leading to a freeze on payments for covered deposits and triggering the involvement of deposit insurance.
“in mid-October, EURAM bank was banned from continuing its business with immediate effect. This also led to a stop in payments for covered deposits. This made the private bank a case for deposit insurance,” the FMA explained.
Money Laundering Scrutiny Delays Payouts
Adding to the woes of EURAM’s customers, many are facing further delays in accessing their funds. Following the bank’s closure, a number of customers are being subjected to official checks by Austria’s Money Laundering Reporting office within the Federal Criminal Police Office on suspicion of money laundering.
“After the financial institution was closed, a number of customers are still being subjected to official checks by the Money Laundering Reporting Office at the Federal Criminal Police Office on suspicion of money laundering,” the FMA confirmed.
Founded in 1999, EURAM specialized in private banking, real estate financing, and asset management, operating across Europe, Russia, the Middle East, and Central Asia.
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