BRUSSELS (Reuters) - The European Union’s top banking watchdog has found “general and systematic shortcomings” in Malta’s application of EU anti-money-laundering rules, it said on Wednesday.

The European Banking Authority’s (EBA) criticism came as it concluded an enquiry into the way Malta’s anti-money laundering watchdog the Maltese Financial Intelligence Analysis Unit (FIAU), investigated alleged wrongdoings at Pilatus Bank, a lender on the island.

The Maltese FIAU said in a statement it was “disappointed” with the EBA’s report and had “serious reservations” about the enquiry.

The EBA’s enquiry pointed to general and systematic shortcomings in the FIAU’s application of EU anti-money laundering rules, the regulator said.

The EU justice commissioner Vera Jourova said the EBA findings were “troubling news”.

Pilatus Bank’s assets are currently frozen and the Maltese Financial Supervisory Authority last month recommended to the European Central Bank to withdraw its banking license.

Maltese authorities had until then imposed no sanctions on the bank despite initial findings by the FIAU itself in 2016 of alleged suspicious activities at the bank.

The EBA is also investigating the Malta Financial Services Authority which granted the banking license to Pilatus Bank. This enquiry is still ongoing.