Norges Bank’s Executive Board has put Toronto-Dominion Bank (TD) under observation for four years due to an “unacceptable risk that the company contributes to or is responsible for gross corruption or other serious financial crime”.

TD is one of the largest banks in Canada and has a significant presence along the eastern seaboard of the USA.

In a statement, Norges Bank said this decision is based on a recommendation from the Council on Ethics on 5 March 2025 and falls under the conduct-based criterion in the Guidelines for Observation and Exclusion from the Government Pension Fund Global § 4 g.

The Council on Ethics’ investigations found that TD may be linked to multiple cases of financial crime that have taken place over the past 10–15 years.

In 2024, the authorities in the USA and Canada fined TD record sums in relation to money laundering and non-compliance with regulatory requirements intended to combat money laundering. TD was also fined in 2013 in relation to non-compliance with anti-money laundering legislation in the USA.

“This should have given the company a powerful incentive to improve its routines and internal control procedures. Despite this, the US authorities point out in connection with the fine issued in 2024 that extensive and similar failings in TD’s compliance have existed since 2014,” the Council stated.

The Council acknowledged that TD has made “sweeping changes” to its management in recent times and has adopted an ambitious plan for improvements, which, along with the fines imposed, reduce the risk of similar incidents reoccurring.

Despite this, the Council made its recommendation as the extent to which these plans will be realised within the indicated period "remains uncertain", especially in light of the "significant amount of work that remains to be done to create a good compliance culture within the company".

Norges Bank said its board has not independently assessed all aspects of the recommendation but finds it “sufficiently substantiated” that the observation criteria have been fulfilled.

Before deciding to place a company under observation, Norges Bank considers whether other measures, including active ownership, may be better suited.

“The board’s assessment is that it is not appropriate to use other measures in this case,” it stated.

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