The European Banking Authority shelved an investigation into the €200 billion Danske Bank scandal on 16 April.

The 45-page EBA report seen by the Financial Times alleges that the Danish and Estonian financial regulators breached EU law and made recommendations for remedial action. The EBA board of supervisors rejected the internal draft report and voted to close the investigation and ignore the suggestions.

According to anonymous sources, the EBA board meeting vote was split and there were...