By Jenny Strasburg 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (September 25, 2018).

Germany's financial watchdog ordered Deutsche Bank AG to bolster its controls to prevent money laundering in a public reprimand Monday that comes amid a growing focus on European lenders' progress policing financial crime.

The BaFin, or Federal Financial Supervisory Authority, cited Germany's federal money-laundering and banking acts in assigning Deutsche Bank an internal monitor as part of the order, which took effect Sep. 21.

The regulator provided little detail in demanding "measures to prevent money laundering and terrorist financing," in a notice on its website.

"We are in agreement with the BaFin that we have to improve these processes in the Corporate & Investment Bank further," Deutsche Bank said in a statement. The lender said it will work with accounting firm KPMG, the appointed monitor, "to fulfill the regulatory requirements as soon as possible."

The regulator privately reprimanded Deutsche Bank for missing reporting deadlines and other procedural requirements of German law, rather than citing a specific client or incident, according to a person familiar with the matter.

The German markets regulator joins U.S.-based authorities who have installed half a dozen overseers inside Deutsche Bank in recent years to oversee fixes to compliance problems and other weaknesses. The monitoring is typically part of legal settlements. Other monitors have been placed inside the bank by a New York federal judge, the U.S. Justice Department and New York's Department of Financial Services.

The BaFin's action comes days after Denmark's largest bank, Danske Bank, cited as suspicious more than $230 billion in transactions that flowed through its tiny Estonian branch. Danske's chief executive, Thomas Borgen, resigned last week in connection with the massive Russian-linked money-laundering case, which has drawn scrutiny from U.S. criminal investigators and European authorities.

Deutsche Bank acted as a correspondent bank for Danske, handling dollar wire transfers. A confidential whistleblower complaint more than two years ago identified Deutsche Bank as involved in transactions into and out of Danske Bank's Estonian branch, The Wall Street Journal reported earlier this month. Deutsche Bank ended the relationship in 2015. A bank spokeswoman declined to comment

Deutsche Bank has had unusually high turnover in the top ranks of its financial crime-fighting division. Earlier this month it promoted a London-based senior risk officer, Stephan Wilken, to be head of anti-financial crime and chief of anti-money laundering, effective Oct. 1.

Mr. Wilken replaces an executive who is leaving for Danske Bank. That executive, Philippe Vollot, took over Deutsche Bank's top anticrime role in January 2017. He was the bank's third global head of financial crime-fighting named in less than a year, replacing an executive who held the job six months.

Write to Jenny Strasburg at jenny.strasburg@wsj.com

(END) Dow Jones Newswires

September 25, 2018 02:47 ET (06:47 GMT)

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