Judge impounding European bank (4)
I believe the answer is:
reef
'bank' is the definition.
(I've seen this before)
'judge impounding european' is the wordplay.
'judge' becomes 'ref' (referee).
'impounding' is an insertion indicator.
'european' becomes 'e' (abbreviation e.g. EU).
'ref' placed around 'e' is 'REEF'.
(Other definitions for reef that I've seen before include "Great Barrier formation?" , "Coral or rock just below sea surface" , "Shoal; take in (sail)" , "Free (anag.)" , "Coral outcrop" .)