By Teis Jensen
COPENHAGEN (Reuters) - Foreign investors sold Danish shares worth almost $14 billion in 2018 following a money laundering scandal at the country's largest lender Danske Bank, Denmark's central bank governor said on Wednesday.
Danske Bank is under investigation in the United States, Denmark, Estonia, France and Britain over 200 billion euros ($226 billion) in payments from Russia, ex-Soviet states and elsewhere that were found to have flowed through its Estonian unit between 2007 and 2015.
Non-residents sold Danish equities worth 91 billion crowns ($13.85 billion) last year, including 21 billion crowns' worth of banking shares, a report from the central bank showed on Wednesday.
The divestment of bank equities may reflect a loss of confidence in the Danish banking sector in the wake of Danske Bank's money laundering case, it said.
"The trust from international investors has certainly been reduced," governor Lars Rohde told reporters in Copenhagen.
He said political initiatives to combat money laundering were paramount to restore foreigners' trust in Danish banks.
He said Danish politicians should consider new rules to force banks to block payments if they are suspected of being related to money laundering, similar to current rules governing payments suspected of being linked to financing terrorism.
Danske Bank's annual report shows shareholders from the United States and Canada cut their holdings in the bank during 2018 to 17 percent of Danske's shares by the end of that year from 24 percent by end-2017.
British investors also reduced their holding in Danske Bank over 2018 from 16 percent to 12 percent, while Danes and other Europeans increased their holdings of Danske Bank shares.