EU regulators have warned of serious weaknesses in the bloc’s controls on money laundering, after scandals engulfing Danske Bank and other lenders fuelled concerns that the it was failing to crack down on illicit funds entering the banking system.

A confidential paper prepared by EU financial supervisors said recent events had “exposed shortcomings” and “gaps” in how different national and EU authorities co-operate to stamp out flows of dirty money.

The report, seen by the Financial Times, follows a year of damaging revelations, including US accusations that Latvian bank ABLV helped to finance North Korea’s nuclear programme and the discovery that around €30bn of Russian and ex-Soviet money flowed through Danske Bank’s Estonian branch in a single year.